Chippies, brickies and tilers are expected to abandon Melbourne and go west as Victoria’s 10-year building boom stalls over the next two years.
The state’s homebuilding economy growth will plunge from top of the nation to the bottom by 2022, according to the Housing Industry Association.
It’s the second industry-shaking blow in days after Premier Daniel Andrews on Monday announced just five people would be allowed to work on new home sites at any given time during a six-week “pilot light phase” for the industry as the state battles COVID-19 cases.
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It also comes as industry guidance has warned construction workers will need to carry a permit to go to work on Melbourne building sites from 11.59pm Wednesday night, or risk being fined.
HIA senior economist Tim Reardon said COVID-19 would cost the state its “quite remarkable” six-year reign as Australia’s new homes powerhouse with plunging migration and international student numbers to erode the population growth driving demand for new homes.
Mr Reardon said Victoria’s housing industry had consistently outperformed its 10-year average for a decade, but with the number of new homes being built to fall from 55,000 in the past financial year to 44,000 across the next 12 months, the industry will lose jobs.
International demand has lead substantial skyscraper construction in Melbourne over the past decade. Picture: David Caird.
Builders working on apartment complexes around the city will be the most at risk, but the $25,000 federal government HomeBuilder grants are expected to provide a short-term boost for new house construction.
“Even with HomeBuilder and other government support programs, it’s difficult to see Victoria getting back to building the same number of homes in the next few years,” Mr Reardon said.
“Victoria has been attracting skilled building workers from a number of states, particularly out of WA and SA, but as employment opportunities slow there, and pick up in the west, we are likely to see some of those skilled building trades go back west.”
Carpenters, bricklayers and even tilers are among those likely to relocate.
Skilled builders are expected to abandon Melbourne over the next two years.
Prime Minister Scott Morrison on Wednesday flagged “serious issues” with how Victoria’s stage four lockdown would affect major construction projects and said the federal government would be watching how the state moderated its initial plans for the industry.
It was not clear if these concerns related to housing construction projects.
The Master Builders Association of Victoria yesterday warned the “pilot light phase” could impact up to $456m in revenue for the state a day.
At a press conference on Wednesday, Mr Andrews said they were working through special consideration to allow specialist trades and supervisors to move between various project sites under the new restrictions under a COVID safe plan.
Despite the current concerns, HIA’s latest Housing Scorecard showed how successful Victoria had been prior to COVID-19 at driving jobs growth, demand from international students and major infrastructure projects — with all three spurring its construction industry.
Those working on apartment construction are expected to be hit hardest. Picture: Jay Town.
The scorecard measures industry activity based on new house and unit construction, renovations, housing finance and migration figures.
It ranks states based on how they are performing against their own 10-year average.
The HIA report suggested that by 2022 Western Australia, currently at the bottom of the nation’s rankings, will replace Victoria at the top.
It is expected to rise as a result of falling international migration around the country, of which it has almost no reliance on at all.
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