But trade prices have stabilised and the shortage is expected to ease over the remainder of the year.

In the March quarter edition of its HIA Trades Report, the Housing Industry Association has analysed available supply and price movements across thirteen housing construction trades.

All up, the report shows that a shortage remains for each trade – albeit with the overall shortage having moderated since reaching a peak in June last year.

The worst impacted trades include bricklaying, carpentry, other trades, roofing, and ceramic tiling.

The shortage is evident across all regions, with Regional SA and Regional Queensland being most affected.

However, trade prices were unchanged during the March quarter.

This builds on a broader trend of trade price stabilisation which has become evident since the middle of last year.

The shortage in trade availability is being driven by a backlog of housing projects along with disruptions to skilled migration flows which occurred during the pandemic.

Such a shortage remains despite the recent slump in new housing projects, which combined with a return in net migration is likely to see the trade shortages ease throughout the second half of the year.

The latest data comes as a review released last week made 38 recommendations to overhaul Australia’s migration system.

As reported on the ABC, potential reforms include abolishing the skills shortage list and enabling Jobs and Skills Australia to determine the occupations that are in need, boosting the minimum wage that can be offered to skilled workers on employer-sponsored visas, overhauling the points test that helps to determine which applicants are most desirable and establishing a pathway to permanency to ensure that Australia does not lose people on temporary skils visas when their visas run out.

Meanwhile, building industry lobby groups are pushing for changes to boost the number of skilled tradespeople coming up through apprenticeships and to improve apprenticeship completion rates and outcomes.

This includes additional spending measures in the upcoming Commonwealth Budget.

In HIA’s case the organisation is pushing for:

  • $100 million over three years to establish a national on-line resource to deliver an ongoing industry mentoring program for building apprentices.
  • Introduction of an apprentice wage subsidy program to operate on an ongoing basis to assist employers to overcome the productivity deficit and risk of taking on apprentices, particularly in Years 1 and 2.
  • A new wage subsidy to offset the difference between junior and adult apprentice wages and thus to help provide adults (aged 21 and over) with equitable access to apprenticeship training opportunities.
  • Changes to enable apprentices to transfer the apprenticeship incentive between employers and therefore to retain the incentive should they move to a new host or employer.

Speaking of the longer term, HIA Economist Tom Devitt said the importance of both skilled migration and training should not be underestimated.

He says immigration policy needs to be integrated with an overall population policy and should be based around need as opposed to an artificial gap on permanent migration.

This is particularly important as migrant workers will be increasingly needed as Australia’s population continues to age.

As for the immediate outlook, Devitt says the shortage of trades will ease.

“As more workers arrive from overseas, home building and renovations timelines that have blown out during the pandemic will shrink,” Devitt said.

“The demand for and the supply of skilled tradespeople will approach equilibrium again.

“As the volume of work currently underway remains large, the effects of consecutive rate hikes by the RBA have yet to reach the Index.

“It is anticipated that the RBA’s actions to date will result in a more significant easing of the shortage of trades later this year, as well as some more declines in the prices of trades.

“The current pipeline is progressively being completed, with an increasing number of projects being cancelled. The number of new projects commencing construction is also set to fall to its lowest level in over a decade.

“This will see the volume of homes under construction shrink and demand for skilled trades fall.”

 

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