Australia’s chronic shortage of construction workers continues to severely constrain housing supply, with economists warning there is no simple solution to increasing the number of homes being built.
Cotality head of research Gerard Burg, a former senior economist at the National Australia Bank, said boosting the construction workforce would be a key step towards easing pressure on housing supply.
“I don’t think there’s a single easy answer,” Burg told The Epoch Times.
He described the broader challenge of adding supply as a “wicked problem” involving multiple factors, but said reducing the labour constraint would deliver a significant benefit.
Burg said the workforce shortage could be addressed through a combination of increasing training opportunities for Australian workers and carefully targeted skilled migration.
“If you can find skilled migration, skilled labour who are willing to migrate to construction, that would be fantastic,” he said.
“You can ramp up training programs for apprentices and build those skills domestically as well.”
He noted that construction costs had increased by around 36 percent between 2020 and 2025. While policies such as One Nation’s proposal to remove GST from building materials could reduce costs, Burg said they would not address the broader challenges facing the industry.
Burg said policy changes aimed at encouraging investment in new housing could make newly built properties more attractive to investors. However, he did not expect a dramatic shift away from established homes.
Historically, investors have directed the majority of their purchases towards existing properties, with around 80 to 90 percent of investor purchases typically being established homes.
Ongoing Workforce Pressure
Master Builders Australia said recent labour force data showed ongoing pressure on the construction workforce, with around 20,000 construction jobs remaining unfilled.
“It’s looked unlikely that the shortage of workers will be resolved anytime soon,” Master Builders Australia chief economist Shane Garrett told The Epoch Times.
Garrett also said the number of construction apprentices in training had fallen to a five-year low.
Master Builders Australia chief executive Denita Wawn criticised the Federal Government’s decision to reduce apprenticeship incentive funding in the latest budget, warning it could make workforce shortages worse.
“We don’t have enough apprentices starting out and we aren’t keeping enough of the ones we do have,” she said.
“The Federal Budget revealed that Key Apprenticeship Program funding will be cut by $227 million next year.”
Wawn said 28,290 construction apprentices exited training early in 2025 without gaining qualifications, meaning the number of people leaving construction apprenticeships exceeded the number completing them.
“All options must be on the table, domestic training initiatives need to be increased alongside a properly targeted skilled migration program to close the workforce gap,” she said.
Government Defends Apprenticeship Programs
The federal government has defended its efforts to grow the construction workforce, pointing to apprenticeship incentives designed to encourage more people into the industry.
Skills and Training Minister Andrew Giles said more than 32,000 apprentices were being supported through government apprenticeship programs.
“The latest data shows the program is delivering what it set out to do, building a strong pipeline of trade skills to build more homes in communities across Australia,” Giles said.
Under the government’s Key Apprenticeship Program, eligible full-time housing construction apprentices can receive up to $10,000 in support over the course of their apprenticeship, while eligible employers can also receive incentives.
Giles said 32,563 apprentices were now learning housing construction skills, with around 85 percent of apprenticeships under the program occurring through small businesses.
He said the program had also supported greater participation from women in traditionally male-dominated trades, with 1,522 women taking up apprenticeships through the scheme.
