Tradies vie for work as home building activity is tipped to slow
Frustrated homeowners struggling to find a tradie may soon be in for a reprieve as experts warn of an impending slowdown in home building.
Frustrated homeowners struggling to find a tradie may soon be in for a reprieve as experts warn of an impending slowdown in home building.
Data from online tradie platform hipages suggests tradies are out in force looking for work as a backlog of renovation and construction looks set to clear and competition for jobs heats up.
From July to December 2022 hipages recorded its largest half year of new sign ups, with a 36 per cent year on year jump in registrations.
This included a 40 per cent surge throughout the October quarter.
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January saw the largest monthly increase on record with more than 5,000 tradies signing up – a significant jump from the typical rate of 3,000-3,500 new registrations per month.
It comes as an industry expert warns of an impending slowdown in the construction industry.
HIA chief economist Tim Reardon said the effect of the RBA’s interest rate hikes hadn’t yet been measured due to the 18 month lag experienced in the construction industry.
But it was highly likely that the onslaught of nine consecutive rate hikes would result in a slowdown in home building once the current pipeline of work dried up towards the end of the year.
“The area that concerns us is that lending for the purchase and construction of a new home is now 64 per cent lower than what it was in January 2021 and we haven’t yet seen the full impact of last year’s cash rate increases,” he said.
He said there was still double the average amount of construction work on the ground to cover the industry until the slowdown hit – the severity of which would be largely determined by the speed and size of further rate hikes.
“This is not a falling off a cliff moment for the building industry, this is a long steady slowdown, but what we don’t want the Reserve Bank to do is exacerbate that cycle,” Mr Reardon said.
“The Reserve Bank doesn’t need to crash the economy in order to save it.”
“There is an acute shortage of housing stock in Australia.”
“There are implications from this rate rising cycle for the supply of housing stock and that would be a concern for the government who have a goal of building a million homes over the next five years.”
“Every rate increase is going to make that goal harder and exacerbate the inequities that come with house price cycles we’ve seen over the past couple of years.”
Hipages co-founder and CEO Roby Sharon-Zipser said the hipages figures suggested a return to a more balanced market after a period of high demand.
“You’re talking about a 40 per cent increase in interest from trades looking for work,” Mr Sharon-Zipser said.
“If you look at the previous year, there was so much work in the market. We saw record volumes of jobs coming in.”
“But then we started to see a bit of a slowdown in the job flow.”
“Quickly following that we saw trades registering on our platform at record levels.”
He said the data showed that tradies were more responsive in providing quotes, with the number of returning customers also increasing from 14 per cent to 25 per cent.
Out of those responding to work posted on the platform, there had been a 31 per cent increase in builders and a 25 per cent increase in handymen claiming jobs over the last quarter.
Mr Sharon-Zipser said this was typical following busy periods in the construction industry, where carpenters, electricians and plumbers were subcontracted for home builds and had limited availability for repair and maintenance work.
“When the construction slows down it frees up those subcontractor trades and they then go back to their roots which is to do the smaller maintenance and repair work,” he said.
“That’s what we’re seeing now, a lot more influx of trades coming in, and that’s why we’re seeing that returning registration number reaching record levels,” he said.
He said this was good news for homeowners.
“The activity and responsiveness of trades because there is more balance coming into the market means the consumers can know they’re getting a fair price.”
Sydney electrician Darcy Stewart said there was a lot of competition for work at the moment.
“There’s quite a lot of work out there at the moment but there are also quite a lot of trades,” he said.
“Jobs where we’re not well known with the builder we can really get squeezed on price because there are always guys out there doing stuff for cheaper.”
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Originally published as Tradies vie for work as home building activity is tipped to slow
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