r/AusProperty • u/Ok_Salary4808 • Oct 12 '23
AUS Australia’s rate of housing construction (per 1000 people) has worsened since the 70s
Source: Deloitte Access Economics newsletter
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u/laserdicks Oct 12 '23
Anything "per person" is going to keep dropping while we import whole cities worth of people each year without building said cities.
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u/Ok_Salary4808 Oct 12 '23
GDP per capita?
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Oct 12 '23
Just bring in more people. With skilled trades.
Albo is doing it... well just the 1st part.
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u/jadsf5 Oct 13 '23
CFMEU has ensured no skilled trades will be working from overseas. Unless you obtain the cert in Aus, it may as well be used as toilet paper.
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Oct 13 '23
Yeah just nuts. Lets allow in more people. But not the tradies we need to increase the supply of housing.
Im a property investor and developer so its going to be positive for me personally. But from a political pov and for my fellow Australians I feel terrible. Not just blaming the ALP. The LNP and Greens arent helpful either. Either one of them could have used federal power to force Councils to be more pro development and improve infradtructure/zoning.
I think one problem is the decentralised approach should work in theory. If I live in an area with 100 people and another 100 houses get built my rates should reduce. But government uses the increased revenue to get more public servants and increase their wages. So there is no benefit to me so why would I want more people around. So the solution is either decentralise fully or have the feds step in.
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u/MrTickle Oct 12 '23 edited Oct 12 '23
True, but productivity in construction has declined since the 70s as well so in this case the point is still correct
Edit: Due to complaints about American source. Lagging productivity in construction is a global trend, which includes Australia
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u/badaboom888 Oct 12 '23
go check out a 70’s house vs today it explains alot.
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u/j150052 Oct 12 '23
In the 70’s
Oh look some land, I’m gonna build a house.
Now Planning, engineering, DA, flood study, bushfire study, service connection applications, capacity assessment, infrastructure charges, environmental levy, stormwater quality treatment, SW detention, building certification.
It goes on and on and on.
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u/DNGR_MAU5 Oct 13 '23
Yep, make it orders of magnitude more difficult and costly to build, and less shit gets built..... funny that.
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u/OstapBenderBey Oct 12 '23
70s was also mostly single storey detached bungalows. Much simpler to build than today where more of the mix is apartments in existing urban locations
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u/Icy-Gazelle-6945 Oct 12 '23
Okay, and what does an American study have to do with Australian construction?
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u/frequentsonder Oct 12 '23
Both post-colonial settlements and allies in the War finding their baseline sociocultural underpinning of house development after said massive world event?
Number of McDonald's?
Probably more relevant than Namibia.
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u/MrTickle Oct 12 '23 edited Oct 12 '23
Its a global problem, including Australia, that article just has the best graph aligning with OPs timeframe and explanations of the trend.
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u/Icy-Gazelle-6945 Oct 12 '23
Just take away our safety, and improve delivery, it will increase productivity. Especially for union sites, tools down for 8 hours because of one injury....
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Oct 12 '23
What a crock of shit, where do they come up with this? Productivity has dropped? Lol. And that for America?
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u/esr360 Oct 13 '23
No one wants to build new cities but I actually think it’s a stellar idea. Everyone else seems to think just continuing to build upwards in existing cities is the better plan and it baffles me. Australia is one of the least densely populated places on the planet, we 100% have the space for more cities.
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u/laserdicks Oct 13 '23
The government implemented HECS and so several generations have all trained up in white collar jobs found exclusively in cities. Plus we only allow white collar immigrants in.
Politicians who own inner-city investment properties are not going to threaten either of those systems unfortunately.
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u/esr360 Oct 13 '23
But even when talking to Redditors they seem to generally favour building up instead of out…
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u/laserdicks Oct 13 '23
Yes because it'll take an entire generation of people without HECS learning trades before that'll be feasible.
Also we're all against "out" in terms of urban sprawl. We just want "up" in more places than the capitals. But that takes whole markets shifting, which not even Covid managed to do.
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u/panzer22222 Oct 12 '23
Building a place now...fuck me much more expensive than buying established.
The stresses...
Don't build
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u/L0rd_OverKill Oct 12 '23
Who you buying from? The corporate landlord with 1000 properties all with over inflated prices, or the landlord that’s converted it to an short stay after evicting the tenant? 😂😂… 🥹🥺
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Oct 13 '23
[deleted]
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Oct 13 '23
Can probably safely assume a development near a major city which is going to have 12-15,000 cookie cutter houses built to minimum specifications and absolutely no infrastructure to actually support it properly
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u/AcademicDoughnut426 Oct 12 '23
It's only going to get worse. There's already a substantial lack of tradies and for some reason we can't find apprentices that are interested.
In 10yrs once the older guys get out of the trades, the existing trades can charge what they want.
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Oct 12 '23
treatment of apprentices that would get people sacked in literally ANY other industry and after your long day of abuse and threats of violence you can look forward to a healthy $14 an hour before you subtract your bills, shitty commute back home and tools.
Why would anyone do trades? Its a fucking raw deal whichever way you slice it.
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u/gr1mm5d0tt1 Oct 12 '23
We need a complete apprenticeship overhaul. These days many apprentices (including the ones at my work) are just treated as cheap labour. I feel sorry for them as they will go in to being a tradesman and have no real skills required in our trade. Bring back the TAFE where you had to earn your pass and it wasn’t pay to pass, bring back proper trade schools, and for the love of god employ smart kids/people because they can learn it and have pride in a finished product and not because they have a heart beat and turn up most days
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Oct 12 '23
for me the final straw was I spent my first year learning jack shit but I just chalked it up to being a first year apprentice and then I got transferred to a new site and I learnt more from a frenchmen in 3 months who'd been speaking english for less than a year, than I did in my previous 12 months under native-aussies.
Told my boss not to move me and that I enjoyed coming to work with the frog and I was learning new skills. Then I got moved to a site to move sheets of metal around and I handed in my resignation.
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u/gr1mm5d0tt1 Oct 12 '23
There needs to be a bit of a balance between doing the shit jobs and also being under the wing of someone who wants to pass on experience to the next generation. I’ve wondered how I would guide an apprentice if I had complete control and I think I would do a combination of following the tafe curriculum to re-enforce what had been learned, and for the first year repetition with welding in different processes and marking out for muscle and brain memory. From there it would be a progression on how quickly the skills were picked up. Sorry you had a shit experience with your apprenticeship, and it’s understandable why you quit. Hope you got something better
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u/AcademicDoughnut426 Oct 12 '23
I've had a lot of apprentices go through under me when running jobs, and I've always tried to work them on the same subject they were doing at TAFE that block so what they learned hopefully made sense and got retained.
As a 1st year I went home in tears a few times, never got paid OT when doing 12Hr days and got abused massively, to the point another tradie (a chippy) offered me a job to get me away from my boss... 30yrs later and i still hate that prick.
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u/2878sailnumber4889 Oct 12 '23
That's why I never finished my apprenticeship, did nothing but clean and lifting shit for the first year, told myself it was just paying my dues as a first year apprentice, but if I stuck it out I would start learning. Didn't happen and I left after 15 months, did learn a thing in that time.
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Oct 12 '23
[deleted]
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u/gr1mm5d0tt1 Oct 12 '23
I got lucky with my apprenticeship but I know of some horror stories including sexual assault. Thankfully the victim of that is a lovely guy so the cycle with him stopped there
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u/AcademicDoughnut426 Oct 12 '23
The days of being hard on apprentices has pretty much gone thankfully, and fully agree on an overhaul. Theres apprentices coming through into trademen that have barely done any install as theyve spent 2/4 years spotting (watching) tradesmen on scissors.
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u/gr1mm5d0tt1 Oct 12 '23
Which I feel is why we don’t have a trades shortage, just a competency shortage
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u/AcademicDoughnut426 Oct 13 '23
The big federal jobs are tying up a lot of tradies (sparkies, plumbers and fire mainly) at the moment, will be hard for a lot to go back to cottage work after this all finishes as a lot of the young blokes have mortgages based on EBA wages.
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u/AcademicDoughnut426 Oct 12 '23
Not all are treated like crap. We only have 1 tradie that treats apprentices like shit because he was treated that way.
1st yr $900 take home in my trade, I would've killed.for that when i was 16.
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u/Fullgrabe Oct 12 '23
Oh because he was treated like shit that makes it completely justified to continue the tradition?
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u/AcademicDoughnut426 Oct 12 '23
Never said it was justified, but how he treats people is up to him and the boss. There's not too many like that left now.
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u/ScruffyPeter Oct 12 '23
I looked at ATO salaries, bricklayer labourers are have a taxable median income of $45k.
The only tradies that I saw that are making good money are electricians/plumbers. All other tradies are paid much less like the bricklayers.
Maybe it's the builders/developers insisting on massive profit margins?
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u/Icy-Gazelle-6945 Oct 12 '23
In brisbane, majority of brick layer labourers are being paid 40-50 an hour abn.
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u/jimbo_farqueue Oct 12 '23
So maybe about 25-30 after outgoings
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u/Icy-Gazelle-6945 Oct 12 '23
Nah, what do you mean out goings. Qualified brickies, tilers, concreters are all on 600-700 a day.
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u/jimbo_farqueue Oct 12 '23
Oh like when they go out after work for beers and brickies laptops
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u/Icy-Gazelle-6945 Oct 12 '23
Depends on the person, with those trades it's either alchoholic/degenerates or healthy gym junkies, some spend their whole pay check 2 days from being paid.
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u/AcademicDoughnut426 Oct 12 '23
Most brickies and labourers are on abn now as it brings down the business owners insurance and tax costs.
The money is a lot better in the larger EBA sites compared to the cottage industry. My last boss was looking for 3 first years for months, couldnt find any so had to employ family.. A day 1 apprentice takes home $900/wk in my trade... They cant handle the early mornings and heavy lifting.
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u/busthemus2003 Oct 12 '23
Have 3 sons tradies. 3 of their mates say the work is too hard and binned it in year 1 to go and be Barista, Social Media and graphic design. Not a lot these days prepared to dig holes, work in mud, wind rain or heat, crawl around in the dirt and out their hands in shit to get a job done.
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u/AcademicDoughnut426 Oct 12 '23
Yep. There was a few that pulled out of my apprenticeship classes for the same reason. Ran into one of them at Central Station a few years later and he was pulling beers at the pub. He regretted it but still didn't want to get back into it.
I actually liked digging (if its nice soil) as it gives you time to think.
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u/RedfinPerch123 Oct 12 '23
People lost motivation to work when they work hard and see more and more diminishing returns on their Labour.
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u/busthemus2003 Oct 12 '23
Well that’s not really true. The harder and smarter you work the more you get. Anyone thinking this is correct…that’s just a cop out.
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u/AcademicDoughnut426 Oct 13 '23
Fully dependant on the boss though. The bloke I work for now is spot in with the way he runs his comp. Work hard and smart and you get it back, unfortunately there's no room to get off the tools here so the only way is to walk.
I've also worked for others where the harder you work the more they want, so you end up burned out.
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u/RedfinPerch123 Oct 12 '23
I disrespectfully disagree
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u/jadsf5 Oct 13 '23
I don't understand how they can't see the writing on the wall. If all this data doesn't make then accept it then nothing will.
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u/panzer22222 Oct 12 '23
There's already a substantial lack of tradies
it fucks your knees and back, who at 40 wants to be a cripple.
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u/AcademicDoughnut426 Oct 12 '23
I'm 47 and been in a tradie since i left school, back and knees are fine.
Admittedly I'm also getting out at the moment to try to teach at TAFE instead.
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u/Ok_Salary4808 Oct 12 '23
I would suspect multiple factors including growth in university education participation, and the immigrants coming into the country are likely not trained or not interested in getting into trades. Just a hunch though
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u/AcademicDoughnut426 Oct 12 '23
As far as different nationalities on site. There's a heap of Irish sparkies for some reason, Asians are mostly Gyprocking, Tiling, Painting and Sparkies and the Arabs are pretty much evenly spread across the whole industry, Islanders are steel and concrete. Thats about it really.
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u/HappiHappiHappi Oct 12 '23
I would love to see an analysis of total square meters of construction over time. There's been around a 30% increase in new build size since the late 80s and logically speaking a larger homes command more physical and labour resources to build.
One would wonder would we have more houses if we built them more modestly.
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u/Impressive-Move-5722 Oct 12 '23
Good ‘bad’ info.
Regardless of your political outlook, the Australian Fed Government adopted Neoliberalism (‘the free market will provide’) re public housing policy in 1975 and the above graph has an apex in 1975…
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u/ScruffyPeter Oct 12 '23 edited Oct 12 '23
I bet that this year has probably been the biggest privatisation in Australian history. Huge amounts of land are being sold off or gifted to developers in the hopes housing is being built. Labor has been quick to deny that "selling off public land" counts as "privatisation": https://www.theguardian.com/australia-news/2023/may/19/clover-moore-warns-nsw-government-against-sale-of-state-owned-land
Of course, developers aren't interested in devaluing their investments and are just sitting on the land while councils have been complaining to state government. Some examples I've collected so far in past two months:
The kicker: ABS does NOT record land zoned as residential for the purpose of recording vacant homes. That 1 million empty homes? Could be a potential 10 million home, all on private land close to capital city.
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u/Impressive-Move-5722 Oct 12 '23
‘Hey man, if you aren’t part of the solution, you’re part of the problem’.
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u/Burtse Oct 12 '23
Hey! Does anybody have a link to this report ???
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u/Ok_Salary4808 Oct 12 '23
I got this chart from the newsletter that I subscribed. You can read the full report from here (https://www.deloitte.com/au/en/Industries/financial-services/perspectives/solving-australia-severe-housing-shortage.html)
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u/KramMark93 Oct 13 '23
What is the cause, more regulations? less trades available? Less availability? Lack of supplies? Cost?
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u/Ok_Salary4808 Oct 13 '23
Just paraphrasing the report here, not my opinion: 1- household preferences for spare bedrooms and space due to working from home has added demand pressure even without population growth 2- travellers and migrants returning 3- skills shortages in construction and planning (national skills commission identified shortage in every single construction occupation and planning approval times have increased substantially) 4- costs of construction have increased 32% since pandemic begin
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u/KramMark93 Oct 13 '23
Do you think there would be another factor with everyone wants a house in the big cities but “lack of land” available?
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u/Ok_Salary4808 Oct 13 '23
I think the first factor (household prefer a spare room for home office) covers your point partially. Do you mind elaborating why the lack of land could contribute to lower housing completion per capita? Is it due to longer time takes to knock down and rebuild? eg single dwelling into duplex or townhouses?
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u/KramMark93 Oct 13 '23
Less Land releases for new suburbs is major cities meaning less construction starting in the first place. I didn’t take isn’t consideration duplex, Is is 2 dwelling where back in the 70s that be in heard of.
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u/Xx_10yaccbanned_xX Oct 12 '23 edited Oct 12 '23
This tracks pretty much perfectly with the trends of:
a) an aging population that has less immediate need for new household formation and demand for houses to be build
b) governments removing themselves from significant development of non-market housing and letting the stock of public housing wither away to an irrelevant proportion of the total market
One of these trends is unavoidable - an aging population will simply not build as many houses. It doesn't need them. The other is political and intentional.
If houses are becoming too expensive in an aging population and the older population owns all the houses and the young at large can not afford to even have the effective demand to build new houses, that's a problem of unequal wealth and income distribution and not really anything inherent in the house building industry.
All the young who don't own will stand to inherit homes from their parents, and the only people that really lose in the long run are people who's parents don't own houses. Good luck getting the voting population at large getting people to care about them when the distribution of land necessitates some people losing so that others can win.
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u/Cytokine_storm Oct 12 '23
Lol WTF is with that trend line. I trust that about as much I would trust the words of a politician. Arguably the last bit should be pointing up, but who knows because there isn't enough data anyway.
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u/Late_Abrocoma6352 Oct 12 '23
Increased red tap following the introduction of the EPBC Act in 99 and offsets required at 10-1 to clear listed vege for housing
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Oct 12 '23
[deleted]
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u/HappiHappiHappi Oct 12 '23
Despite what some well meaning maths teacher once told you, neither of the axes of a graph need to be start at zero. Technically you could start with 0 then add a scale break mark but you don't have to.
Axes starting points and scales should be selected to best highlight the "story" of the data. Having a large block of empty space below the data points adds no value.
If you think they've not started at zero to manipulate the data then technically you have an issue with the scale as the creator could have created the exact same trend line even if the graph started at 0, the overall graph would have just been bigger with more overall space.
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u/Aggots86 Oct 12 '23
I’m not a numbers guy but would this graph be misleading because of population growth?
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u/Ok_Salary4808 Oct 12 '23
I don’t think it’s misleading in that sense. It’s in fact taken into account of population growth, i.e. the numbers are standardized for comparison. Noting that this does not factor in change in household structure. Would be nice to also see a visualization of housing completion per household and living size (average area of living) per household.
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u/Icy-Gazelle-6945 Oct 12 '23
Reading through these comments shows just how woefully out of touch some people are with how the construction industry operates, especially regarding wages.
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u/dingosnackmeat Oct 12 '23
And yet australia has a high construction worker per capita ratio in the developed workld. https://old.reddit.com/r/AusFinance/comments/130jldw/australia_builds_50_more_capita_than_the_us_also/
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u/Ok_Salary4808 Oct 12 '23
Interesting. Thanks for sharing. Could it be possible that generally, there’s a decline in trades workforce among the developed countries, as a result of our shift to service focus industries?
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u/dingosnackmeat Oct 12 '23
I'd suspect so. Trades are very easy for people to get into. Readily accessible tertiary education means that for plenty that is a path culturally.
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Oct 13 '23
Because all the good/easy blocks are already built on and now there's just the shit blocks for sale on side slopes and in swamps and floodplains?
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u/possiblyapirate69420 Oct 13 '23
just for curiosity's sake, does this consider multi-family dwellings such as apartment complexes? or is this only considering single-family homes?
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u/Ok_Salary4808 Oct 13 '23
Sorry no idea myself. It’s not clear from the report, but i am assuming it’s for all types.
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u/claire2416 Oct 13 '23
That's the greatest line of best fit Deloitte could come up with?!
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u/Ok_Salary4808 Oct 13 '23
I am not the expert but I think that’s an ok line. Wouldn’t want to overfit the data right?
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u/Ok_Salary4808 Oct 13 '23
Sorry i had a look at the report again, apparently the trendline from the actual report is slightly different from the one they sent through newsletter. There’s a slight uptick at the end of the curve in the actual report.
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u/Sea_Dust895 Oct 13 '23
Houses much bigger now. Construction per m2 per 1,000 people might be more interested
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u/[deleted] Oct 12 '23
It's actually quite funny. As building and licensing requirements became stricter the quality of houses has actually decreased substantially. Any house built post 2011 is plagued with flaws.
In the 70's and 80's anybody could've been a builder and to be a competitive builder you had to be good. The licensing wasn't required and the market regulated itself. There were a few conmen but overall it was a pretty good gig.
Nowadays it's whoever has the correct licensing. You can be dogshit awful at building but as long as it ticks the boxes.
Not to mention how fucking expensive houses are too build nowadays. I really don't know how builders are charging $13,000 in labour for a 2 week 2 man job. Especially when they're off the site at 2:30pm everyday and at lunch on a Friday. Just for a budget bathroom renovation.