Australia\u2019s housing affordability crisis is only tightening its grip after the Reserve Bank hiked interest rates this month for the fourth time this year, bringing the cash rate to its highest point since 2011.<\/p>\n
And while recent drops in property prices across the country might have provided a glimmer of hope to potential buyers looking to get into the market, experts and consumers agree that supply is the biggest hurdle to overcome. <\/p>\n
And while the solution – to build more homes – might seem obvious, the biggest barrier to making that happen is a crisis in itself.<\/p>\n
There\u2019s rare consensus across both sides of politics that the simplest path out of the affordability crisis is to build more houses, but a major challenge standing in the way of this is a desperate shortage of people to do the building.<\/p>\n
This story is part of an ongoing series. Download our new app <\/a>for more coverage<\/p>\n \u201cFundamentally, the biggest challenge in housing in Australia is supply,\u201d Commonwealth Bank chief economist Luke Yeaman told news.com.au.<\/p>\n \u201cWe have built too few houses in Australia, and that means that you\u2019re always going to see upward pressure on prices… If you don\u2019t solve that, then nothing else will materially solve the problem at the source.\u201d<\/p>\n MORE:\u2018Crashed\u2019: Aus city\u2019s stunning home price fall<\/a><\/p>\n Potential buyers agree. According to data from the 2026 Homefront Campaign Research Report, a collaboration between CommBank and Newscorp, 60 per cent of Australians believe that increasing the supply of new homes will improve housing affordability \u201ca fair bit\u201d or \u201ca lot\u201d.<\/p>\n MORE: \u2018Low\u2019: Panic as new Albo scheme backfires<\/a><\/p>\n \u2018No one on the tools\u2019: The 116,700 tradie black hole<\/p>\n The National Housing Accord, a multi-government and industry agreement designed to address Australia\u2019s structural housing undersupply, has a target of building 1.2 million well-located homes by 2029. <\/p>\n But According to BuildSkills Australia, the Federal Government\u2019s Jobs and Skills Council for the built environment, the nation is staring down a shortfall of the 116,700 construction workers and tradespeople needed above normal levels to get close to the national target. <\/p>\n One of the factors driving this bottleneck is the fact that roughly half of all apprentices walk away before qualifying for a trade.<\/p>\n Master Builders Australia chief executive Denita Wawn warns that everyday Australians are the ones footing the bill for the workforce drought.<\/p>\n \u201cThe construction workforce shortage is showing up in building costs and project timelines for Australians looking to build, renovate or buy,\u201d Ms Wawn told news.com.au.<\/p>\n \u201cAustralians should call on their local Members of Parliament to act on the nation\u2019s skilled workforce shortage. The sooner we act, the better placed Australia will be to tackle the challenge. The longer action is delayed, the harder and more expensive the solutions will become.\u201d<\/p>\n Master Builders Australia last month released its Future Workforce Blueprint<\/a>, an analysis combining public data sources to model Australia\u2019s capability to produce more skilled workers, as well as the policy levers and pathways to do so most effectively.<\/p>\n The Blueprint contains 32 policy recommendations, including four priority levers, that Master Builders Australia CEO Denita Wawn says are essential to meeting our housing, infrastructure and economic ambitions.<\/p>\n The four priority policy levers are:<\/p>\n \u2022 A Commonwealth payroll tax rebate on apprenticeship wages<\/p>\n \u2022 Expansion of Group Training Organisations (GTOs)<\/p>\n \u2022 Recognition of Prior Learning (RPL) reform, including activating the 18,400 construction-qualified workers already living in Australia<\/p>\n \u2022 A Construction Training Bond to improve apprenticeship completion rates.<\/p>\n \u201cTogether, these reforms would reduce the annual workforce shortfall by between 3590 and 5720 workers per year over and above the initial burst of activating 18,400 skilled workers,\u201d Ms Wawn explained. <\/p>\n \u201cThe outlook would improve even further if the other recommendations were adopted in full.<\/p>\n \u201cMigration remains an essential part of the solution, but it cannot replace the need to rebuild Australia\u2019s domestic skills pipeline. Equally, attracting apprentices means little if we continue losing over 50 per cent before they complete their training.\u201d<\/p>\n Australians \u2018afraid to build\u2019 due to shortages and insolvency fears<\/p>\n This uncertainty around the construction industry\u2019s ability to cope with the volume of work required has resulted in a skittish consumer base with a phobia of new builds. <\/p>\n New research from SEC Newgate with the Growth Distillery revealed that 62 per cent of Australians who refuse to buy off the plan do so out of fear the builder will go bust, while 50 per cent point to endless construction delays.<\/p>\n In addition, the National Housing Affordability Project revealed only 23 per cent of first-home buyers are even willing to look at a newly built home. This leaves the other 77 per cent fighting over the existing property pool, in turn driving national rental vacancy rates down to a grim 1.8 per cent.<\/p>\n \u201cA serious and clear issue for us in the supply space is construction productivity in Australia is very poor,\u201d Mr Yeaman said. <\/p>\n \u201cWhen you benchmark our construction productivity against peer countries around the world, it is very low. That\u2019s one of the reasons why housing is expensive \u2013 because there\u2019s a lot of cost in the system, and it\u2019s also one of the reasons why supply has lagged demand.\u201d <\/p>\n Read related topics:Reserve Bank<\/a>The Home Front<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Australia\u2019s housing affordability crisis is only tightening its grip after the Reserve Bank hiked interest rates this 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