NSW Housing Boom Leading to Construction Trade Shortages

Wednesday, February 18th, 2015
liked this article
Allegion – 300 x 250 (expire Feb 28)
hard hat
FavoriteLoadingsave article

As the housing construction boom gathers momentum, tradespeople in New South Wales and Sydney are becoming increasingly hard to find and more expensive to source, according to senior commentators.

Housing Industry Association Senior Economist Shane Garret said that whilst there is no massive shortfall overall, pressures associated with trade availability have begun to emerge in a number of trades which are primarily exposed to the residential side of the industry, such as bricklaying and carpentry.

“New South Wales probably is a little bit more constrained trade wise compared with the rest of the country,” Garrett said, adding that this was largely being driven by the rapid increase in building activity in that state.

“The trades which seem to be experiencing shortages are bricklayers in particular and also carpenters and plasterers, plumbers and, to a lesser extent, roofers. So you can see that that’s very residential construction based stuff where the pressures appear to be mounting.

“Against that backdrop, construction outside of the residential area has been a little bit on the weak side, and that’s probably cushioning demand from the strength of the residential sector in some areas – the ones [trades] which have a degree of transferability between residential and commercial are where the pressure seems to be a little less intense.”

Garrett’s sentiments are widely supported by other commentators. BIS Shrapnel associate director Kim Hawtrey said recently that advertised vacancies had picked up for carpenters, joiners, electricians and house painters, whilst Master Builders Australia Chief Economist Peter Jones said the increase in home building work was yet to translate into higher take up of apprenticeships – a long term concern for the industry.

Around New South Wales and especially in Sydney, record levels of housing starts have seen demand for tradespeople and construction workers skyrocket: during the three months to November, more than 290,000 people (291,800) were employed in the sector throughout the state, according to ABS estimates – around 54,700 more than compared with the same period one year earlier.

Such an increase coincides with low numbers of apprentices having been trained during the recent building downturn within that state, creating an inevitable crunch on labour availability now that building work has picked up.

As well as resulting in difficulty in sourcing labour in some areas, meanwhile, Garrett says the shortages in trades are pushing trade rates up, adding to the cost of building or renovating a home.

“Rates do appear to be going up and as you would expect that is primarily happening where there are shortages are,” he said.

“The pressures appear to be affecting prices as well. The old laws of supply and demand are definitely raising their head in the residential construction business at the moment.”

FavoriteLoadingsave article


 characters available
*Please refer to our comment policy before submitting