Experts at Master Builders Australia have warned that low apprenticeship numbers will worsen the nation’s housing crisis if action is not taken immediately.

The warning comes after new Australian Bureau of Statistics data revealed that 2023-24 was the worst year for home building in more than a decade, dropping 8.8 per cent to 158,690 new starts.

“Detached house starts fell by 10.1 per cent, while higher density commencements were down by 6.0 per cent,” said Master Builders Chief Economist Shane Garrett.

“If building continues at this pace, we’ll be in for less than 800,000 new home starts over the next five years.”

“This would mean a shortfall of over 400,000 homes compared with the National Housing Accord target.”

The data release, revealing a drop to numbers not seen since 2011-12, coincided with fresh data from the National Centre for Vocational Education Research which showed declines in apprenticeship numbers.

In NSW, 12,230 new construction apprentices started out over the year to March 2024, 5.6 per cent lower than in the year to March 2023. This contributes to the national decline in apprenticeship commencements of 11.8 per cent, from 47,110 to 41,520.

Although nationally, apprenticeship completions fell 8.6 per cent from 24,545 in the year to March 2023 to 22,420 to March 2024, NSW saw an even more significant reduction. 6,940 apprentices in NSW successfully completed their training over the year to March 2024, a 15.7 per cent reduction on the previous year.

The number of apprentices in training in NSW at the end of March 2024 was 37,435, 2.1 per cent lower than a year earlier. This mirrors the national trend, where the number of apprentices in training declined 2.2 per cent from 124,280 to 121,530.

Master Builders Australia CEO Denita Wawn said the new data painted a concerning picture for Australia’s housing crisis.

“Today’s data releases aren’t unrelated. To bring Australia out of the housing crisis we need to drastically increase the supply of housing,” said Ms Wawn, “and we can’t do that while we’re simultaneously suffering through a labour shortage.”

“Low apprentice numbers reflect a shortage of skilled workers across all trades, and until we’re able to address the challenges facing the future of the workforce, we won’t be able to increase building activity and reduce the impact of supply conditions in the residential building market on Australia’s inflation problem.

“It’s no longer appropriate to call for a return to pre-Covid levels, we need more tradies now than we’ve ever had.

“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,” Ms Wawn concluded.

Master Builders Australia’s “Future of the Workforce: Building and Construction Industry” report, which highlights the growing need for action to increase the workforce. To read the full report click here

Key Data:

• Significant drop in new home builds: 2023-24 saw an 8.8% decrease in new home starts nationally, the lowest in over a decade.
• Dwelling type breakdown: Detached house starts fell by 10.1%, while higher density construction dropped by 6%.
• Projected housing shortfall: At the current pace, Australia could face a shortfall of over 400,000 homes compared to the National Housing Accord target.
• National decline in apprenticeships: Commencements dropped 11.8%, completions fell 8.6%, and the number of apprentices in training decreased by 2.2%.
• Worsening situation in NSW: NSW experienced a 5.6% drop in new construction apprentices and a 15.7% reduction in completions.
• Link between housing and skills shortage: Master Builders Australia emphasizes the connection between the housing crisis and the shortage of skilled construction workers, highlighting the need for increased apprenticeships to boost housing supply.