Australia’s housing crisis is facing an alarming escalation as new data reveals a significant drop in apprentice numbers, coinciding with a sharp decline in new home builds. The National Centre for Vocational Education Research (NCVER) has reported an almost 9% fall in apprentice numbers over the 12 months leading to March 2024, adding to concerns about the future of Australia’s construction industry.
At the same time, the latest figures from the Australian Bureau of Statistics show that new house builds declined by more than 10% over the last financial year, marking the worst year for home construction in more than a decade. This stark decrease is causing anxiety across the building sector, with industry leaders such as Master Builders Australia warning that the nation’s housing crisis will continue to deepen unless urgent action is taken.
Alarming Decline in New Home Builds
The 2023-24 financial year saw an 8.8% drop in new home starts, falling to 158,690. Detached house starts dropped by 10.1%, while higher-density residential commencements decreased by 6%, according to data from the Australian Bureau of Statistics. The figures point to an industry in decline, with the worst building numbers since 2011-12.
Master Builders Australia has repeatedly sounded the alarm about the compounding impact of low apprentice numbers and reduced home construction, predicting a shortfall of over 400,000 homes over the next five years if current trends continue. Master Builders’ chief economist, Shane Garrett, warned that unless building rates increase, Australia will see less than 800,000 new home starts in the coming years, far below the targets set by the National Housing Accord.
Apprentice Numbers Falling Behind
The National Centre for Vocational Education Research (NCVER) report further compounds the concerns, revealing a steep decline in apprenticeship numbers, particularly in the trades crucial for home building. Apprenticeship completions fell by 8.6%, dropping from 24,545 in the year to March 2023 to just 22,420 by March 2024. Apprenticeship commencements also saw a significant decline of 11.8%, falling from 47,110 to 41,520 over the same period.
These declines are particularly troubling for the building industry, which is heavily reliant on a skilled workforce to meet housing demands. The number of apprentices currently in training also dropped slightly, from 124,280 to 121,530, reflecting an overall downward trend in recruitment and training across the sector.
Industry Leaders Sound the Alarm
Australia’s largest residential builder, Metricon, expressed concern over the slow intake of apprentices into the construction industry. Phil Barrett, General Manager for Metricon Regional Housing Victoria, emphasised that the housing crisis is hitting regional areas, such as Victoria, especially hard. He described the shortage of skilled labour as a critical roadblock to building new homes and maintaining the vitality of regional communities.
In response, Metricon is taking proactive measures, including a partnership with key industry bodies to boost trade apprenticeships across regional Victoria. One such initiative is the company’s collaboration with the Building & Construction Foundation for the Mario Biasin Scholarships, which will provide $15,000 in funding for two trade-based and two leadership-focused scholarships aimed at cultivating the next generation of building professionals.
These efforts, while important, will not be enough to reverse the broader decline in apprentice numbers or solve the housing crisis without further government intervention.
Government Action Urgently Needed
Denita Wawn, CEO of Master Builders Australia, stressed the urgent need for government action to reverse the current trends in the building sector. Wawn explained that the labour shortage is severely impacting the industry’s ability to increase the supply of housing, and the declining number of apprentices is only exacerbating the problem.
“We urgently need governments to look at solutions to increase the number of tradies, increase the number of apprentices, and help Australian builders increase supply so we can come out the other side of this housing crisis,” Wawn said.
The NCVER data suggests that a significant portion of the drop in apprentice numbers occurred in non-trade occupations, particularly among clerical and administrative workers. These occupations saw a 21.3% decline, with the largest decreases seen in roles such as office and practice managers and general clerks. However, the relatively smaller drop in trade occupations, with a 1.6% decline, highlights the specific pressure on the skilled labour pool in the building trades.
Apprenticeship Shortfall Threatens Long-Term Housing Supply
The long-term impact of these trends could be devastating. Without an adequate supply of skilled labour entering the construction industry, Australia will struggle to meet its housing needs, particularly at a time when population growth and immigration are increasing demand for housing.
Barrett of Metricon underscored that regional areas are already feeling the strain, with a lack of skilled labour leading to delays in new home builds and adding pressure to an already overburdened housing market. He noted that without an influx of new apprentices, builders will be unable to keep pace with demand, leading to further price increases and worsening affordability.
A Coordinated National Response Required
Industry experts agree that a coordinated national response is necessary to tackle the dual crises of housing affordability and skilled labour shortages. Solutions must include a focus on increasing apprentice numbers through greater incentives for training, more accessible pathways into the trades, and collaboration between government and industry to streamline the apprenticeship process.
Additionally, reforms that address gender imbalances in the trades could help alleviate some of the shortages. The construction industry remains heavily male-dominated, and encouraging greater diversity in the workforce could help close the labour gap.
Ultimately, the construction industry is at a critical juncture. Without immediate action, the decline in apprentice numbers and the start of new homes could have long-lasting consequences for the housing market and the broader Australian economy. Now more than ever, it is essential to invest in the future of the building trades, ensuring that the country has the skilled workforce it needs to meet its housing challenges head-on.
