Moreton Bay Today - Housing Industry Association Managing Director Jocelyn Martin talks AI Data Centre Construction Bidding War for Tradies and Housing Costs

Australia’s data centre boom is putting even more pressure on an already stretched construction workforce. HIA Managing Director Jocelyn Martin joins Travis Groves on Moreton Bay Today to discuss the race for skilled tradies, what it could mean for building costs, why Queensland is bucking the national housing approvals trend, and how fuel prices, interest rates and global conflict are impacting the cost of building a home.

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AI Data Centre Boom Creating a Bidding War for Tradies?

SPEAKER_00 0:00

Australia's data centre boom is creating a new problem, a race for the skilled tradies needed to build them. The Housing Industry Association, or HIA, and the National Electrical and Communications Association, that's a mouthful or NECA, warning that electricians and other construction workers are already in short supply, and the surge in data centres could put even more pressure on housing, infrastructure, and project costs. To unpack what's happening, I'm joined by HIA managing director, Jocelyn Martin. Jocelyn, good morning. And are we heading into a bidding war for tradies? Not that we weren't in one already with the Olympic projects, and what does that mean for the cost of building a home?

SPEAKER_01 0:40

Yeah, well, certainly with this kind of recent increase and surge of data centers onto the market, that's um putting uh a pressure on electricians that we hadn't actually seen in quite the same before. So they were already in high demand, and now to uh see that kind of work come onto the market, and the electricians uh are being offered uh quite significant salaries and so forth to make the less residential construction and into data centres. So we can only see with the Olympic project, for instance, and um and the data centers that this uh bid for trades is going to get worse and impact their ability to supply

Housing Approvals Falling National, How Can We Change That?

SPEAKER_01 1:26

new homes.

SPEAKER_00 1:26

So on housing, approvals are falling nationally, but Queensland's still doing relatively well. What's driving that difference and what needs to happen to keep building costs down and get more affordable homes on the ground?

SPEAKER_01 1:40

Yeah, so nationally we are seeing um approvals fall, and we are certainly seeing an impact in uh new home um inquiries and so forth after the federal government's budget announcements in June and a couple of interest rate increases have impacted as well. Fortunately, in Southeast Queensland, approvals and commencements are holding up. What needs to happen to get more homes on the ground? I mean, in the first instance, it's probably the availability of shovel-ready land. I mean, we've seen land, um the price of land increase by about 500% over the last 15 years. So, unless we can get land to market and infrastructure to support that last mile infrastructure, then that's probably the first thing that we need to do. Now, in markets like Southeast Queensland, where the government have done a fair bit to actually improve that situation. And when the market starts to reach its peak in that sense, that's when you'll really see the impact of skills shortages. And, you know, the work that's going on in Southeast Queensland, in places like South Australia and Western Australia as well, that skill shortage is the thing that is going to put a cap on what we can build.

Straight of Hormuz, Fuel Costs, Interest Rate Impacts?

SPEAKER_00 2:51

And how much are things like the Iran conflict, higher fuel prices, they came down a bit with the discount on the fuel excise have gone back up again and interest rates adding to the cost of building a home?

SPEAKER_01 3:01

Well, certainly uh when the conflict in the Gulf commenced, we saw uh significant increases initially from there. Certainly the supply chain has uh settled down a bit, but at a higher level. And so the cost of building a home has uh has increased, the cost of construction has increased, but still that cost of land is probably taking up a higher and ever higher proportion of the cost of a house and land um combination. Um and that's where the real increases increases lie. Um if we were to see any more uh um if we were to see any more uh constrictions around the Gulf and any more fuel impacts on the fuel, we would see increases in uh construction costs as well. But you know, when we limit the uh amount of available trades, that's when we will see um an impact come through and costs uh too. The trade in index that we run shows there's a widespread shortage of trades across the country, and that continues to have an impact on the cost of construction.

SPEAKER_00 4:11

The Housing Industry Association Managing Director, Jocelyn Martin, thanks for joining Wombay today.

SPEAKER_01 4:16

Thank you, bye bye.