Kathryn Lee - 21 Oct, 2020

Construction slowdown could see tradies leave Victoria

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Melbourne tradies have felt the brunt of Stage 4 lockdown restrictions as the Andrews government’s coronavirus response continues to impact the Victorian construction industry.

Regarded as a ‘heavily restricted workforce’ under stage four, first step restrictions, Melbourne construction workers are only permitted 25% of the workforce onsite at large commercial construction projects, and only 5 workers onsite for small scale construction, plus a supervisor.

“Our construction sector, the lifeblood of our economy, will also move to pilot light levels,” said Victorian Premier Daniel Andrews in a 3 August statement on business restrictions.

“This will allow the industry to keep ticking – while also making sure we limit the number of people onsite.”

Stage four restrictions were first implemented in Melbourne on 2 August to help combat the COVID-19 crisis, putting the city into lockdown.

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On 13 September Melbourne took its first action towards reopening and began the first step of a three-step plan. However, it won’t be until at least 28 September that Melbourne tradies are shown some grace, provided the 14-day case average remains on target between 30 and 50 cases.

Restrictions are making progress limited for the Melbourne trades industry, who are only permitted on-site at residential addresses if it is for emergency or critical repairs. Under the guidelines, domestic renovation projects with people living on the premises have been put on hold and worksites for new builds (with no occupants) are only permitted five workers.

If stage four, step two restrictions go ahead on 28 September, the industry will move from being classified as a ‘heavily restricted industry’ to a ‘restricted industry’. There will be little change to the current measures in place for small scale construction, however, large scale construction will be permitted a daily maximum number of onsite workers of 85% of their baseline workforce or 15 people, whichever is greater.

Housing Industry Association senior economist Tim Reardon says the number of new homes being built in Victoria will fall from 55,000 in the last financial year to 44,000 over the next 12 months. He expects the industry to lose jobs, and he believes Victorian construction workers will be prompted to move interstate for work.

“Even with HomeBuilder and other government support programs, it’s difficult to see Victoria getting back to building the same number of homes in the next few years,” Mr Reardon told Realestate.com.

“Victoria has been attracting skilled building workers from a number of states, particularly out of WA and SA, but as employment opportunities slow there, and pick up in the west, we are likely to see some of those skilled building trades go back west.”

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Job losses revealed

A report released by consulting firm Taylor Fry has revealed a 7.7% drop in employment in all industries in Victoria since the pandemic began in March.

Initially, the report detailed a 4.5% drop in construction however, new figures have showed the second wave to more severely impact the sector, the figure rising to almost 7%.

Taylor Fry principal and co-founder, Alan Greenfield believes the drop was due to tougher restrictions.

“Pre-pandemic, construction jobs accounted for about nine per cent of all jobs in Victoria, making it the state’s fourth-largest employer,” Mr Greenfield told the Australian Financial Review.

“The closure of hardware stores and restriction on the number of workers allowed on work sites is taking its toll.”

Victoria’s construction sector has lost about 13,000 jobs between early July and early August.

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Victoria new home sales drop

Victorian new home sales declined by 14.4% during August, according to new figures from the Housing Industry Association (HIA).

The New Home Sales report detailed the figures for Victoria, New South Wales, Western Australia, Queensland and South Australia. Of the fives states, Victoria was the only one to experience a decline.

Private new house sales Victoria

Source: Housing Industry Association (HIA)

“The restrictions on travel and trade during the month of August have clearly impacted sales,” said the report.

“This leaves New Home Sales in Victoria 12.0 per cent lower in the six months from March to August 2020 compared with the previous year.”

HIA Victorian Executive Director, Fiona Nield believes the decline is likely to continue into September results.

Ms Nield also holds concerns for the accessibility of the HomeBuilder scheme in Victoria, which requires applicants to have signed a home building contract by 31 December 2020.

Find out more about the HomeBuilder scheme: Federal government package offers $25,000 grants to home builders, renovators

“The stage 4 restrictions are also now inhibiting many Victorians ability to access HomeBuilder, which is available for a very limited period of time,” Ms Nield said.

“To be eligible for the grant, home buyers need to sign a home building contract by 31 December 2020. Even after home buyers are able to visit display suites and choose their builder, there will be limited time to complete the detailed design requirements before this deadline.

“Home buyer access to display homes and centres for material selection are pivotal for the signing of home building contracts. It is critical that home buyers be permitted to attend these premises by appointment as soon as possible.”

Words by Kathryn Lee


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