Construction Workforce Shortage Impacts Housing Supply in Australia
A new report by the Productivity Commission highlights the impact of construction workforce shortages on Australia's housing supply. This issue is a major concern for voters ahead of the upcoming federal election.
The report's release coincides with Master Builders Australia's (MBA) forecast that the construction industry will need an additional 130,000 workers to meet the National Housing Accord target of 1.2 million new homes by mid-2029. This target was set in 2023 following an agreement between industry, the Commonwealth, and the states and territories.
However, the target is already off-track. National Housing Supply and Affordability Council modelling shows that the target will be missed by about 257,000 dwellings. The Productivity Commission report states that construction workforce issues are impacting new supply and contributing to poor productivity.
The report also highlights the importance of attracting and retaining apprentices. The federal government recently announced a $10,000 incentive scheme for those entering the housing sector. MBA Northern Territory chief executive Damien Moriarty believes that apprentice wage subsidies for employers should also be increased and made easier to access.
Increasing skilled migration to Australia is another avenue to boost the workforce. The government expanded its skilled occupation list last year to include several construction trades. The Productivity Commission recommends improving skill assessment criteria for qualified migrants to expedite their entry into the workforce.
The report also emphasizes the need for a more consistent licensing system across jurisdictions and improved support for apprentices.
The housing stock shortage has been significantly influenced by a lack of workers. Property tax breaks have also contributed to investors increasing their portfolios, leading to many people being priced out of home ownership.
Curtain University economist Steven Rowley believes that the lack of profitability from some developments is another key factor. Construction costs have risen by about 40% over the last few years, making many projects financially unviable. Professor Rowley suggests that government subsidies for construction infrastructure could help more developments get off the ground.
8 Comments
Habibi
“Increasing skilled migration and easing licensing systems can really help meet the National Housing Accord targets.”
Rotfront
“This analysis is spot on. If we don’t address the workforce shortage now, our housing crisis will only worsen.”
Karamba
“The $10,000 incentive is a positive step toward attracting young talent to the construction industry.”
Matzomaster
“I support the call to improve the apprenticeship scheme – we need more practical support for our future builders.”
Rotfront
“Improving training, upgrading licensing standards, and supporting apprenticeships will create a better future for everyone.”
Michelangelo
“By confronting these issues head-on, we can finally move toward meeting the national housing targets.”
Leonardo
“I appreciate that the report calls for more apprentices – investing in skilled labor is key to solving the issue.”
Donatello
“It’s refreshing to see a detailed report that explains why Australia is lagging behind on housing supply.”