Tradie shortage amid HomeBuilder boom

The ‘extraordinary’ success of the HomeBuilder grant scheme has provided a shot in the arm to the construction industry.

The number of approvals to construct new houses jumped 20 per cent to a record 13,939 in February. Picture: Brett Wortman

Record house building approvals driven by the government’s HomeBuilder program have sparked shortages of key tradespeople and helped push the price of materials up by as much as 50 per cent.

As the Australian Bureau of Statistics reported the number of approvals to construct new houses jumped 20 per cent to a record 13,939 in February, the Master Builders Association said building sites faced delays of up to three weeks to get tradies.

Denita Wawn, the association’s chief executive, said there was “considerable pressure” on the supply of key trades and building products thanks to a “perfect storm” of demand.

The ABS figures eclipsed the previous record for approvals set in December, and helped push monthly stand-alone house building approvals up 58 per cent on a year earlier, the seasonally adjusted figures showed.

Australian Institute of Quantity Surveyors president Mark Chappe said there were short­ages of skilled labour and materials in the housing construction market, with some contractors “turning away customers as they don’t have the capacity, or people are having to wait for a few months”.

Mr Chappe said structural timber was in particularly short supply, thanks to climbing demand around the world as other governments undertake similar measures to stimulate construction activity to assist in post-­pandemic recovery.

Timber prices have climbed by 50 per cent in over the past 12 months, he said, and “as timber is used widely in home building, this will be a challenge for the industry in the next few months”.

Bricklaying costs have risen dramatically, with the rate per brick rising from about 80c a year ago to up to $2.50 in Western Australia.

The introduction of the Morrison government’s HomeBuilder program — which offered a $25,000 grant to eligible applicants until the end of the year, before it transitioned to a lower $15,000 — has led to a spike in applications to renovate and build new houses.

ABS director of construction statistics Bill Becker said private house approvals had risen almost 70 per cent since the introduction of the grant in June.

The HomeBuilder scheme ends on Thursday, although applications can be submitted until April 14 for contracts signed by March 31. To be eligible for the scheme, work needed to be started within six months.

Belinda Allen, a senior economist at the Commonwealth Bank, said HomeBuilder had been a “clear success”, with the scheme covering roughly 80 per cent of all house approvals since its inception in mid-2020.

Ms Allen said there was a risk that approvals might drop away sharply after March.

The jump in the number of successful applications to build new homes should leave a tail of strong construction activity that lasts for the rest of 2021, Ms Allen said, before hopefully giving way to an increase in non-residential building as businesses ramp up ­investment.

Close to 80 per cent of builders are experiencing delays of up to three weeks for key tradespeople, including brick layers, roof installers and carpenters, according to a newly completed survey by the MBA of 700 of its members around the country.

The survey showed a 10 per cent price increase for building products such as windows, timber products and steel products.

There were 93,403 HomeBuilder applications as at March 12, according to Treasury data, including 75,256 for new builds and 18,147 for “substantial” renovations. Treasury estimates the scheme will support up to $18bn in residential projects.

Housing Minister Michael Sukkar in a statement said: “HomeBuilder is supporting our economic comeback and will continue to support residential construction jobs well into 2022.”

As the construction and renovation frenzy of the past nine months wanes, Mr Chappe said the worst was over for cost pressures.

“I’m not saying prices won’t increase, it is just that it will be more gradual,” he said.

The lowest borrowing costs on record and a hot property market are helping drive up interest in buying and building homes.

Victoria has had the highest number of HomeBuilder appli­cations, with 26,858 up to March 12, followed by Queensland with 20,549 and NSW with 16,659.

Demand for the HomeBuilder program has also been particularly strong in WA, with 14,247 applications.