Construction jobs disappear as houses become too expensive

Housing Minister, Tanya Plibersek indicated in a interview with the 7:30 report, that one of the objectives of the First Home Owners Boost was to keep the construction sector strong. According to Plibersek, the construction sector accounts for about 9% of employment in Australia.

But as predicted, when the government interfered with the housing market and introduced the first home owners grant, it simply pushed the price up of houses up.

As houses become more expensive, less people can afford to build. As a result, construction jobs are disappearing at alarming rates.

According to the Urban Development Institute of Australia (UDIA), Queensland has lost another 4,200 construction and housing sector jobs since November. This is in addition to the 20,000 full time jobs lost between August 2008 and November 2009 as Queensland’s booming property market starts to sour.

UDIA Queensland president Warren Harris said that in some regions, the housing and construction sector has lost more than 50% of its workforce. “The UDIA has been aware for some time now that significant declines in housing approvals, particularly in attached dwelling approvals, would inevitably lead to significant job losses throughout the state.”

Mr Harris does blame councils and state government’s more much of the cost and red tape, but hits the nail on the head saying the “end product will be unaffordable for the vast majority of home purchasers”.

The government now has quite a dilemma on its hand. The experts believe there is a shortage of houses, but the shortage can no longer be addressed, because new houses are too expensive.

» Construction industry warned of crisis – The Sydney Morning Herald, 2nd April 2010.