Labor’s 1.2 million homes goal under threat due to chronic workforce shortfalls, report warns

Australia risks falling short on its national housing targets unless 90,000 more tradies are recruited in three months.

Labor’s ambitious plan to build 1.2 million new homes over the next five years could be stifled by chronic shortages of tradies, a new report has warned.

Australia needs 90,000 extra construction workers over the next three months to meet the federal government’s housing target by 2029, according to the report by BuildSkills Australia.

Major national infrastructure projects such as Melbourne’s suburban Rail Loop and the Western Sydney Airport will be most affected by acute workforce shortfalls, with estimates calling for the number of construction workers to be boosted from 590,000 to 680,000 by July.

Housing Minister Julie Collins flagged that building ministers were looking at alternative options of construction and conceded there was a “lot of work to do” to reach the government’s five-year housing strategy.

The government was working with states and territories to fix the housing crisis, federal housing minister Julie Collins says. Picture: NCA NewsWire / Martin Ollman

“We know we’ve got an ambitious housing target, which is why we’re getting on with the job, we’re working right across the government,” Ms Collins said on Sunday.

“I know that skills ministers had a meeting just over two weeks ago where they talked about the skills required to meet the housing demand in Australia and the challenges we currently have.”

According to Infrastructure Australia, trade and labourer shortages are growing at the fastest rate and will remain acute until 2025.

A report published in December by the agency predicted a deficit of 131,000 full-time workers in the construction industry by the end of 2024.

National vacancy rates hit a record low of 0.7 per cent in March 2024, according to figures from Domain, with an undersupply in housing coupled with a surge in migration pushing rents higher and locking millions of out of the housing market.

Asked if more relief would be on the cards for struggling renters in the upcoming May budget, Ms Collins said the government was always “looking at how we can improve the cost of living for Australians.”

Australia has a goal to build an average of 240,000 new homes each year by 2029.

Earlier, opposition housing spokesman Michael Sukkar said record-low vacancy rates, a 26 per cent rise in rental costs and a record surge migration suggested that the government’s housing target “couldn’t be met”

“We saw 548,000 migrants to the end of the September quarter - absolute record levels of migration - yet the government’s not using those places to bring in the people skills to build homes,” he said.

“They’re bringing in predominantly students, so we’ve got a migration program that’s not helping build homes.

“All we’ve got is a migration program that’s putting more pressure on the market.”