Labour shortfall persists despite record construction employment and rising apprenticeship numbers
The Housing Industry Association (HIA) has backed the federal government's renewed focus on apprenticeships and skills training, but warned that Australia's residential construction sector remains critically short of the workers needed to address the country's worsening housing shortage.
Speaking at a ministerial event in Canberra attended by Federal Skills and Training Minister Andrew Giles, HIA industry and policy chief executive Simon Croft said the workforce challenge is fundamental to resolving the nation's housing crisis.
"Australia cannot build more homes without more skilled tradespeople," Croft said. "It was encouraging to hear Minister Giles reinforce the importance of apprenticeships as a pathway to secure, rewarding careers while supporting the nation's housing ambitions."
The comments come as housing supply data underscores the scale of the problem. KPMG forecasts net new dwelling supply of approximately 160,000 dwellings annually in FY26 and FY27 — well short of the pace required to meet the National Housing Accord target of 1.2 million homes by mid-2029 — and estimates a supply shortfall of 24,000 dwellings in FY26 alone. Research from the Urban Development Institute of Australia projects a total national dwelling shortfall of 380,000 homes over the next five years, with new dwelling production forecast to fall a further 11% in 2026.
The labour market is a central factor in that supply failure. The construction industry employed a record 1.37 million workers in February 2026 and still could not fill 21,600 job vacancies, with 13 of 15 core residential trades remaining in national shortage. Infrastructure Australia expects construction workforce demand to peak at 521,000 workers by 2027, with the overall labour shortfall projected to reach 300,000 — including a trades and labourers gap of 126,000 by mid-2027.
HIA's own data reinforces the picture. The association's latest Trades Report shows the skilled labour shortage index remained firmly in negative territory during the June quarter 2026, improving only marginally from -0.62 to -0.59, with conditions considerably worse than a year earlier.
Croft (pictured right) cited recent results from the government's Key Apprenticeship Program as a positive sign. "The latest data shows an additional 3,400 apprentice commencements in the housing construction stream of the Key Apprenticeship Program during July alone, bringing the total number of commencements to more than 36,000 since the program began just over a year ago," he said.
"That is a strong monthly result and demonstrates that practical support for apprentices and employers can make a real difference in attracting new entrants to the industry."
However, he cautioned that commencement figures do not guarantee a qualified workforce. "Getting more people into apprenticeships is important, but equally important is ensuring they complete their training and become qualified tradespeople," Croft said.
"Builders and tradespeople invest significant time and resources into training the next generation of tradies, and policies that support apprentices to start, stay and succeed are critical."
Competition from other sectors compounds the challenge. Croft warned that residential builders are losing workers to infrastructure, energy, and data centre projects offering higher wages and longer guaranteed contracts. "The reality is that every sector is drawing from the same pool of skilled tradespeople. Residential building is competing against large-scale projects that often have the capacity to attract workers away from housing construction," he said.
Croft argued that the solution lies in expanding the overall workforce rather than redistributing it between sectors. "If Australia is to achieve its housing targets, we need sustained growth in the overall skilled workforce," he said.
Croft acknowledged the gap between current momentum and what is ultimately required. "The recent growth in apprenticeship numbers is a positive sign, but there remains a significant gap between the number of workers entering training today and the workforce that will be required to meet future housing demand," he said.
"Government, industry and training providers must continue working together to encourage apprenticeships, improve completion rates and ensure employers are supported to train the workforce needed to build the homes Australians are demanding."
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