Home » employment » Beyond Belief: Construction Labour and the Cost of Housing in Australia

Beyond Belief: Construction Labour and the Cost of Housing in Australia


Jim Stanford

The government’s effort to blame unions for high housing costs is not credible at any level.
Among the surprising findings of this study of the relationship in recent years between construction labour and housing prices, are the following:
 Average earnings in the construction industry have grown more slowly than the Australian average over the last five years.
 Real wage increases in construction have been slower than real productivity growth, with the effect that real unit labour costs in construction have declined.
 Construction labour accounts for only 17-22 percent of the total costs of new building.
 Construction costs, in turn, account for less than half the market value of residential property.
 Construction labour costs correspond to less than 10 percent of housing prices (and even less than that in Australia’s biggest cities).
 Construction workers receive far less income from the housing sector than land-owners, property investors, and banks.


 Construction labour accounts for about the same proportion of a house purchase as real estate commissions and stamp duty.
 Homes in Australia are becoming unaffordable even for the workers who build them: on average, a construction worker would need to spend 9.2 years of their pre-tax earnings to purchase a median home (25 percent more than just four years ago).
If the government is genuine in its desire to make housing more affordable in Australia, it should turn its attention to the real causes of soaring housing prices: by cooling off property speculation, more carefully regulating the banking sector, and reforming property-related taxes.

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