The central bank chief has said that a shortage of skills in the housing industry is a major barrier to boosting housing stock.
The governor of the Reserve Bank of Australia (RBA), Michele Bullock, has described Sydney’s housing supply as a “very knotty problem” and stressed the need to ensure Australia has enough tradies and materials to build extra homes.
Speaking on Friday (24 October) at The Daily Telegraph’s Future Sydney: Bradfield Oration, and republished on the RBA website, Bullock said there was a skills shortage in the housing industry.
“The Premier has already set out [that] increasing supply involves changes to planning laws and those sorts of things, and that’s all very positive. But it also involves making sure that we have the skills and the resources to build those extra homes,” she said.
“So we need the inputs, we need the cement, the bricks, the wood, we need trades… we need to make sure that we’ve got all those resources available.
“And if the economy is running too hot, then sometimes that may mean those resources aren’t available.”
Bullock was keen to stress that housing is not part of the RBA’s mandate, but acknowledged monetary policy’s impact on housing prices and stock.
“As interest rates come down, hopefully what you’ll see is people will be able to afford to build more houses, and hopefully we’ve got the skills to build them,” she added.
The governor told The Daily Telegraph’s Future Sydney event that more needed to be done to boost the number of skilled workers in housing construction.
“I do agree that we are seeing, and we hear this in our liaison program, that there is a shortage of skills in the housing industry… we do need to find a way to encourage either people to come in with these skills or people who might be thinking they’re coming out of year 12: Why don’t you go do a trade?” Bullock said.
The government has been falling further behind the five-year National Housing Accord, which targets 1.2 million well-located homes by 30 June 2029.
Many construction firms continue to be stretched by rising costs and a shortage of tradies, in spite of government initiatives to boost numbers.
Bullock bemoans stamp duty challenge
The RBA governor highlighted a drop in home owners downsizing as a “long-term demographic challenge” affecting housing supply.
She questioned whether government policies and taxes should be adjusted to avoid discouraging people from downsizing from larger homes, describing stamp duty as a “considerable barrier” to downsizing.
Speaking about the tax, she said: “I think my predecessor called it a tax on mobility.
“It’s not only a barrier to downsizing, it’s a barrier to people moving to find jobs. So it’s also a barrier for dynamism in the economy because it basically keeps people pretty much where they are, instead of allowing them to up and move.”
[Related: Building activity slips as housing targets fall further from reach]
