Workforce Crunch Threatens Accord’s 1.2m Homes Target

Australia’s ambition to build 1.2 million new homes by 2029 is at risk, with fresh analysis warning the country will need an extra 116,700 construction workers—a 25 per cent lift above business as usual—if the National Housing Accord is to be met.

The findings, from BuildSkills Australia’s Housing Workforce Capacity Study, reveal that the housing build represents one of the most significant labour force challenges in the nation’s history.

BuildSkills Australia’s report proposes five key levers that could help to alleviate the pinch point in the nation’s labour force.

BuildSkills Australia chief executive Brett Schimming said “while employment levels are ultimately shaped by market conditions, skills policy can play an important enabling role”.

The five key levers identified in the report address a reinvigorated apprenticeship training program, increasing female participation, linking immigration to residential construction workers, boosting productivity by 5 per cent with a focus on innovation and modernisation, and an improved VET training system. 

“These pathways are not mutually exclusive ... each has a role to play ... but none will activate without deliberate policy action to unlock capacity, lower barriers, and support workforce adaptations,” Schimming said. 

The report cites data indicating a decline in the size of Australian households during the pandemic and its impact on the nationwide housing supply. 

Off the back of historically low vacancy rates, the Federal Government announced the National Housing Accord target of 1.2 million new homes in five years. 

This does, however, require a significant uplift in the delivery of new housing, which Australia is poorly equipped to manage. 

The residential construction sector currently delivers about 43,000 homes each quarter. In order to hit the housing target, this run rate will need to increase to 60,000 homes per quarter until 2029, the upshot of which is a 23.8 per cent increase in demand for labour in 2029, according to BuildSkills.

But the report warns that rising building costs, insolvencies, weak private investment conditions, and planning bottlenecks remain significant hurdles.

Industry stakeholders also flagged cultural barriers to attracting women and mid-career entrants, as well as the need to modernise training with new technologies and more flexible delivery.

The BuildSkills “policy playbook” sets out reforms such as payroll tax relief for apprentice employers, national licensing reform for trades, targeted migration programs, and the creation of training precincts for emerging construction methods.

Australia can meet the ambition of the Housing Accord—but only if governments and industry take coordinated action now to unlock capacity, lower barriers and support workforce adaptation, according to the report.