Victoria’s building outlook remains tight for the immediate future, with major workforce shortages and ballooning build times combining to put a frustrating ‘handbrake’ on an industry currently struggling to keep up with Government and consumer demand.

However, Master Builders Australia (MBA) is also predicting easing inflation and interest rates over the next couple of years will stimulate Australia’s appetite for investment, which should have a positive flow on for building and construction.

In its Building and Construction Industry Forecasts for Victoria through to 2028-29, which have just been released, MBA warns that nationally workforce shortages continue to be the biggest challenge to the industry, which it says needs half a million new workers between now and 2026. 

The report notes that productivity in construction has dropped in seven of the past nine years, reducing the hourly output per worker by 18 per cent over the past decade. This may help explain the average time it took to build a new home - from approvals to completion – in 2009-10 was just under nine months, but in 2022-23 has increased to an average of 11 months.

Master Builders Victoria CEO Michaela Lihou says the stats show that – for a variety of reasons and influences - constructions times have blown out over the past 15 years.

“Add to that, in that same period, hourly construction wages have risen almost 13 per cent, building material costs have increased more than 33 per cent and the cost of building a house has jumped 39.8 per cent,” says Ms Lihou.

“Based on MBA’s latest modelling, we can see that Victoria will not be able to reach the homes targets and will fall well short.”

“However, we can also see a range of measures which could improve that outlook by working harder with Government and policy makers to attract and retain a bigger skilled workforce. We also need to be investigating and supporting a range of new and innovative approaches to building, such as offsite construction, to augment our more traditional approaches to building.”

UK studies suggest modern methods of construction such as offsite and prefabricated construction can cut building times by as much as a third.

Ms Lihou says an increasing number of countries around the world are now leveraging the benefits of off-site construction where domestic and commercial builds can be achieved quicker and cheaper.

“There are a number of significant benefits of building large components in controlled indoor environments, which are not subject to the challenges of weather and offer more sustainable solutions with less wastage.”

“The time is ripe for more innovation in our industry and we’re keen to work closely with all our stakeholders to assure the industry and consumers that there is room for new methods to be included in our building skillset and it doesn’t mean less quality!”  

“We urgently need more skilled workers both locals and migrants now, we need a consistent flow of apprentices and trainees coming through the system for the future, and we need to look at faster methods of building to supplement our current approaches to bricks and mortar,” says Ms Lihou.

“We need to streamline building approval processes and costs; we need to make sure that new contracts are fair and reasonable for both builders and consumers and we need to do everything we can to improve our supply chain hiccups.”

“We can see the challenges in front of us, now we need to work collaboratively and quickly to make tangible changes.”

Master Builders Victoria CEO Michaela Lihou is available for comment.

Media enquiries: Leigh McClusky 0411 711 780 [email protected]