Tradespeople in Australia’s housing construction sector remain in oversupply as the nation continues to work through a massive volume of new home and home renovation work, the latest data shows.

Releasing the September quarter edition of its HIA Trades Report, Housing Industry Association said its HIA Trades Availability Index registered -0.86 in the September quarter.

Whilst this represents a marginal improvement from the record shortage (-0.92) in the June quarter, it still indicates the second worst shortage on record since the quarterly report began in 2003 (any number below 0.0 represents a shortage of trades).

All trades are in shortfall, with bricklaying, carpentry and roofing being worst impacted.

There is also a shortage of trades across all regions, with Regional Queensland, Regional NSW and Regional South Australia having the greatest shortfall.

Not surprisingly, the shortage is putting upward pressure on trade prices.

Whilst prices rose by only 0.7 percent in the September quarter, they have still risen by more than 10 percent (10.4 percent) over the past year.

HIA Economist Nick Ward said the shortage is being driven by massive levels of activity in new home building and home renovations.

Whilst interest rates will slow building activity, Ward says this will not affect demand for trades on the ground until 2024.

Nonetheless, he says there is light at the end of the tunnel in terms of a record number of apprentice commencements and a recovery in migration which has been faster than expected.

“As at the June Quarter 2022, there were over 104,000 houses under construction across Australia, a record high and 81.2 per cent higher than pre-pandemic levels,” Ward said.

“Renovations activity has also shot to record levels.

“This elevated demand for home building has exacerbated the pre-existing shortage of skilled trades. The rise in the cash rate will slow building activity, but this is not expected to adversely affect demand for building trades on the ground until 2024 …

“There are two bits of good news. Firstly, the number of apprentices in trade occupations was 27 per cent higher in the March Quarter 2022 than the March Quarter 2019, driven by government subsidies and high demand. As these young workers develop proficiency, they will help the industry work through the large pipeline of work that has built up.

“Secondly, this week’s Federal Budget indicates that Net Overseas Migration is returning much more quickly than previously expected. This likely reflects both strong desire from foreigners to live and work in Australia, and some reluctance amongst Australians, relative to pre-pandemic, to live and work overseas.

“This improving source of labour supply will help builders and other businesses with the labour shortages that have been exacerbated by the pandemic.”