Supporting the resilience of Australian homeowners and easing the tradie squeeze
In today’s economic environment, the phrase “cost of living crisis” inevitably continues to make headlines and it may continue for some time to come. It’s no secret that Aussies are feeling the financial squeeze, with rising prices and economic uncertainties prompting a cautious approach to spending.
When we consider Australia’s Consumer Confidence index, the last few weeks have shown some glimmers of positive sentiment, with consumer confidence hitting a high above the 80-pt mark in early October, which marked the end of a period of almost seven months below this level.
Ahead of the anticipated November rate rise Consumer Confidence dipped back down – but interestingly, despite confirmation this week of the RBA decision to increase rates again, the first after four straight months of rates remaining on hold, Consumer Confidence still rose. It’s likely that this sentiment will bounce a little over the coming months.
With this in mind, I’m going to delve a little deeper into the way consumer confidence is shaping the world of home maintenance and renovations, and its impact on the property sector. I’m also going to look at some of the hard hitting and somewhat blurred lines around government regulations for improving the number of qualified tradies, who will be crucial to not only meet new build home targets, but to supporting our current resilient Aussie homeowners.
Investment in home improvement positive, despite fluctuating consumer confidence
When we look at our hipages data for the past year-on-year figures, tradies registering their interest to join are up 14%* and we anticipate they’ll continue to stay up as we move into 2024. It shows that tradie businesses are looking for work. And here’s the interesting twist — despite the cost of living challenges, and the dipping Consumer Confidence, some homeowners are not hesitating to add value to their homes. After all, it’s the Australian Dream that everyone is chasing. Using our trusted platform, in the past 6 months alone, we’ve connected more than 333,000 homeowners and tradies.
Homeowners’ willingness to invest is driven by various factors, including the need for essential repairs, a desire to enhance living conditions and maximising the long-term value that property investments offer.
Their readiness to spend on home maintenance and undertake repairs and renovations has far-reaching implications. It not only bolsters the home improvement industry, but also reflects the value of homeownership in Australian culture. It’s important to recognise the resilience of Australian homeowners who, despite economic headwinds, continue to make strategic decisions to protect and improve their homes. hipages will continue to focus on this huge market, worth more than $40B p/a when last reported in 2021.
Bridging the tradie shortage with the help of skilled migration programs
So far, I’ve discussed current homeowners and their needs and, as shown in our data, we have tradies ready and willing to take on these jobs. Yet what’s obvious in today’s housing market is a shortage of dwellings and the government’s ambitious goal to build new homes for both homeowners and renters. But this begs the question: where are the tradies who will get this work done?
There’s already a persistent shortage of skilled tradies in crucial areas, with electricians, plumbers, carpenters, painters and bricklayers some of the most in-demand. With the goal to build more than 1 million new homes over five years, this draws tradies into the new home building market and away from being available for homeowner upgrade projects. The challenge will be a lack of available skilled tradies able to withstand the rising cost of materials and business expenses while also tackling government red tape on industrial laws.
One potential solution to help ease the squeeze is loosening migration regulations for skilled tradies who could help achieve these long-term goals while helping Australians reach their Australian Dream of owning an (affordable) home.
In making it easier for qualified tradies to contribute their skills in Australia, we can bridge the gap between supply and demand. It could help ensure homeowners have access to the services they need, even in challenging economic times, while providing opportunities for tradies.
Easing the tradie squeeze to help support consumer confidence
After all, let’s not overlook the heart of this issue—the tradies themselves. These are the dedicated people who roll up their sleeves, day in and day out, to keep our homes and construction projects running smoothly. When they’re in short supply, the pressure mounts, and delays are inevitable, affecting not just them but also homeowners.
The situation comes full circle, impacting consumer confidence again, because when delays occur, costs increase. But simplifying the migration process for skilled tradespeople can alleviate the pressure and support both tradies and homeowners.
*(Oct 2022: 4,991, vs Oct 2023: 5,673)