Despite rising interest rates and global instability, home building activity in Australia increased in the March quarter of 2026, adding pressure to a workforce already facing skill shortages.
The Housing Industry Australia’s (HIA) quarterly Trades Report, published in late April, surveyed home builders to evaluate the availability of skilled labour in residential construction and identify demand pressures.
HIA senior economist Thomas Devitt says the latest data indicated a worsening in labor availability on top of the existing shortage of skilled trades in Australia.
“Higher interest rates and recent global events have yet to significantly affect the amount of work under construction. Even a slight increase in building activity can quickly reveal underlying structural labour constraints.”
He says strong population growth and tight rental markets are expected to sustain demand for new housing and renovations, yet low unemployment in the sector means that home building continues to compete with other sectors for both skilled and unskilled labour.
The HIA’s Trades Report revealed the most acute shortages were in bricklaying, followed by ceramic tiling, roofing and carpentry. Electrical work was the only trade with a surplus supply of skilled workers, but that surplus was modest.
There are a number of key reasons for the shortages in the residential construction sector including the onset of major projects such as the 2032 Brisbane Olympics driving workers to other growth sectors, new housing targets putting strain on an already stretched workforce, low-paying apprenticeships and a focus on university qualifications at the expense of trades.
Home builders aren’t the only ones concerned. Property investor Nathan Birch, who has a personal portfolio of over 350 properties and an advisory company, also warned of the severe shortage of up to 130,000 workers just to build homes to meet national targets as well as the increasing costs of building materials that was constraining supply.
“Even with more skilled apprentices, rising fuel prices and import costs have increased building materials by up to 30%,” Birch says.
In a bid to address skills shortages, from 1 January 2026, the Australian government has offered financial incentives under the Key Apprenticeship Program. For priority trades like carpentry, electrical and plumbing, full-time eligible apprentices receive up to $10,000 over the apprenticeship, while eligible employers receive a $5,000 incentive.
