According to The Australian Financial Review today, Sydney property developer Mark Bainey used to have no problem hiring skilled professionals like architects, town planners and engineers when he needed them. Now he says, they're booked out for months.
"There's already a shortage of tradies, but now developers are starting to have problems as early as the planning stages. We're talking top tier architects, engineers of all disciplines and even landscape architects," said Bainey, CEO of Capio Property Group, which undertakes apartment projects from 20 to 150 units.
Bainey estimates that with all the skilled labour shortages in Sydney, costs have risen 20 to 30 per cent in the last year.
While the heat has come out of the market and dwelling approvals peaked last year, the construction phase of the boom is now in full swing, sucking out thousands of building professionals and skilled tradesman like bricklayers, concreters, carpenters and electricians, who might otherwise have worked on smaller projects or undertaken renovations.
Also putting pressure on skilled labour has been the NSW Government's program of infrastructure projects with state building work surging to record levels after bottoming out following the GFC.
"New home building [led by NSW and Victoria] is enjoying the strongest boom in a decade. Activity is set to crest at a high level in 2016," said Westpac economist Andrew Hanlan in February.
A December 2015 report by Master Builders Australia found the difficulty in finding skilled employees rose in 11 out of 16 categories in the December quarter, including site managers, bricklayers, carpenters, project managers and foremen.
The report noted a lift in demand for building and construction workers "particularly in the residential sector" with there now being "some difficulty finding certain employees or subcontractors".
The demand-supply imbalance has also created another problem: a rise in unskilled labour and poor quality workmanship. Fabian Chan, CEO of Sydney-based project developer, manager and builder AAPAC Group said he continued to get a lot of responses to online ads for tradesman, "but some are not very experienced or are new to the industry".
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