Australian homes are now taking several months longer to complete than was the case before COVID, new data reveals.
Released last week, a Master Builders Australia analysis of Building Activity data provided by the Australian Bureau of Statistics found that construction timeframes for new dwellings have blown out by many months compared with those recorded prior to the pandemic.
Across Australia, the data found that:
- Average construction timeframes (from approval to completion) for new detached houses have increased from 8.73 months in 2018/19 to 11.7 months in 2022/23. This consists of 2.3 months between approval and commencement followed by a 9.4 month build time from commencement to completion.
- For townhouses, average timeframes from approval to completion have risen from less than 13 months in 2018/19 to almost 15 months in 2022/23.
- Construction timeframes for new apartments have blown out by more than four months from 24.51 months in 2018/19 to 28.77 months in 2022/23. This consists of 3.9 months from approval to commencement followed by a build time of 24.9 months. Over the past ten years, average construction timeframes for apartments have increased by almost eight months (refer chart).
The data also revealed that timeframes are particularly lengthy in Western Australia and South Australia.
All up, new detached houses in Western Australia and South Australia take 16.6 months and 13.7 months to complete.
This is almost five months and two months greater compared with the national average respectively.
For townhouses, completion times stand at 18.3 months in each state – three and a half months above the national average.
Not surprisingly, the aforementioned increase in build times reflects challenges that Australia’s housing construction industry has faced over the past three years on account of COVID restrictions, weather interruptions and an unprecedented pipeline of new detached house projects which arose out of the Commonwealth HomeBuilder program.
These factors led to severe pressures on the cost and availability of materials and labour.
Whilst such pressures are now easing as the volume of new residential projects has slowed, Master Builders says that the data further highlights challenges in meeting Australia’s housing targets.
In August, National Cabinet agreed to a target of building 1.2 million new homes in well-located areas over the five years from 1 July 2024 – an average of 240,000 residential dwellings per year.
The is well above the 934,000 homes that were completed over the five years to June 2023. It also implies an annual rate of building that is much greater than the 170,100 commencements which Master Builders expects will take place throughout 2023/24.
To meet this target, Master Builders estimates that the construction sector will need as many as 486,000 new workers over the three and a half years from February 2023 until November 2026.
This number includes both new workers to replace those who leave the sector along with additional workers who are needed to construct the higher number of homes.
Almost half of these new positions will be technician and trade roles.
Master Builders says that the task will be made more difficult by proposed workplace reforms under the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023.
Introduced into Parliament in September, the Bill seeks to amend the Fair Work Act 2009 in 22 areas.
Among the most significant changes is a new definition of a casual employee and a new pathway to enable casual employees to convert to permanent employment.
Another change is the Same Work, Same Pay provisions that would enable workers who are employed under labour hire arrangements to receive similar pay and conditions to those which they would be entitled were they employed directly by their host employer.
The Government says the changes are needed to improve worker protections and to address loopholes within the existing legislation.
In particular, it says the Same Work, Same Pay provisions are needed in order to prevent wages and conditions that are negotiated in enterprise agreements being undercut by use of labour hire workers.
However, business groups including Master Builders are opposed to the changes.
It its recent submission to the Bill, Master Builders Argues that the changes would undermine independent contracting and subcontracting, create uncertainty and add to the cost and compliance burden for the building industry.
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