How apprentices will boost housing
A new apprenticeship scheme could soon help bring construction costs down, but another key factor has been identified as the biggest impediment to new housing.
THOUSANDS of new apprentices could help bring down construction costs, but land has been identified as the biggest hurdle to building more homes.
Fresh data reveals 11,407 carpenters, plumbers, and bricklayers signed up to the federal government’s housing construction stream of the Key Apprenticeship Program in six months.
The program is designed to address critical labour shortages in the building sector and speed up the delivery of new homes in Australia, with apprentices eligible for up to $10,000 in financial support throughout their training.
In its second term, Labor promised to support the building of 1.2 million homes and 55,000 social and affordable homes by June 2029.
The Housing Industry Association welcomed the update in apprenticeships but warned labour shortages remained a major constraint on the sector.
“It is one of the biggest operational issues holding the industry back from contributing to meeting the nation’s housing targets,” the association’s managing director, Jocelyn Martin, said.
“The importance of incentives that support the employers who take on apprentices should also not be underestimated.”
While the number of apprentices building houses may be growing, a report by the association and Cotality found that land remained the biggest constraint on the number of homes being constructed.
The report found the price of a residential lot of land rose three times faster than the cost of construction in the past 25 years.
The association’s chief economist, Tim Reardon, said the median price of land rose in the September quarter to a record high.
“Since 2000, residential land prices have increased by more than 500 per cent. Over the same period, construction costs and the price of skilled labour increased by around 150 per cent,” he said.
“The long-run escalation in housing costs has been driven overwhelmingly by land.”
Mr Reardon said the lack of available land was driving up prices nationwide.
“The return of demand for new housing will be diverted into the established housing market, further driving up prices and worsening the affordability crisis,” he said.
Ms Martin said challenges to keep apprentices on also remained an issue, with those costs often borne by businesses.
“Apprentice retention also remains a challenge, therefore targeted retention programs, particularly during the first 18 months where we see a high level of dropouts, are extremely important,” she said.
“There is a clear correlation between the availability and level of incentives, and the appetite for employers to take on apprentices and for young people to consider a career in residential building.”
Apprentices as part of the scheme receive $2000 payments at six, 12, 24 and 36 months and on completion of their apprenticeship.
Employers of the apprentices can also claim up to $5000 in the first year of the apprenticeship.
