Vicious cycle: lack of affordable housing and higher cost of living delays building projects

Building approvals in the Tweed Richmond area increased by 10 per cent, but building companies can’t find enough skilled labour and that has seen projects delayed.

Up to May 2021, the number of building approvals in the Tweed Richmond area increased by 10 per cent, but building companies are finding ti hard to get skilled labour.

A vicious cycle gripping the Northern Rivers building industry has produced an increase in number of dwelling building approvals but a shortage of skilled labour in the Byron hinterland.

Housing Industry Association (HIA) Gold Coast and Northern Rivers regional director, Toni Bull said she had received anecdotal evidence from the organisation’s members.

The HIA represents more than 40,000 members working in the housing industry in Australia.

“We are getting a lot of anecdotal information from members in the Byron Bay area who are finding it hard to get skilled labour, because the cost of living has gone up,” she said.

“Rentals have gone up, so has the cost of living and the cost to build has gone up as well, but this is not something that we have been tracking or reporting on, it’s purely anecdotal.

“Because people can’t afford to live in the area anymore, it’s harder to get some of the skilled labour needed.”

The HomeBuilder grant —introduced by the government in 2020 — is also another factor adding to the building boom.

“Across the country, originally the government expected around 25,000 applications, and they ended up getting about 121,000, so that’s obviously increased the demand on building, and the demand for skilled labour,” Toni Bull said.

“When you have so many homes being built and you don’t have the skilled labour around, you are trying to bring people into regional areas like Byron Bay but you are having to pay a lot more for that trade to come in to do the jobs for you.

“It’s an opportunity for subcontractors to go where they can get the best money at the moment, but they can’t afford to live there because the cost of living and rentals have gone up.

“Projects are being delayed because of materials coming to site and tradesmen are so busy.”

More than 60,000 people departed Sydney and Melbourne to other parts of the country in the 12 months to March 2021. Photo: Jodie Richter

Adding to this pressure is the fact that people are moving from metropolitan enclaves into regional areas, and the number of dwellings approved have also risen.

Ms Bull said the Northern Rivers has seen a 10 per cent increase in approvals to build detached or stand alone homes, townhouses or villas.

She said the data included approvals in the Lismore, Kyogle, Casino, Ballina, Richmond Valley and Byron areas.

“Up to May 2020, there were 1129 approvals in the Richmond Tweed area, and for May 2021 it went up to 1247,” she said.

People leaving capital cities are moving to regional areas.

HIA’s Chief Economist, Tim Reardon, said on August 3 that more than 60,000 people departed Sydney and Melbourne to other parts of the country in the 12 months to March 2021.

“This shift in population is the main driver of the tight rental market that exists across the country, other than in Sydney and Melbourne.”

Adding to the situation is a global shortage of materials, Toni Bull said.

“(Waiting periods for) materials to come into sites are taking longer than they previously have. That has been reported since the end of last year globally,” the executive said.

“It is happening around the country, but it depends on the number of homes being built.”

The Gold Coast, in comparison, has seen the number of dwellings being built increased by eight per cent in the same period, she said.

“But that also includes high rise apartments as well,” she explained.

The amount of work is creating other delays.

In the past, a solution to this has been skilled migration, but with Covid restrictions, the government has been offering incentives to take on apprentices.