Labour Shortages the Key as Melbourne’s Construction Industry Eyes Off a Stable Period of Growth

The construction industry has high hopes for a brighter 2025, with stabilising construction costs and shorter build times on the top of the wishlist.

Stabilising Construction Costs Offer Relief

The COVID pandemic led to a sustained period of higher building material prices in Melbourne.

As we push into 2025, there are signs of price relief and stabilisation, which is welcome news for builders and developers trying to maintain profitability in a tough economic climate.

Labour Shortages Still a Major Challenge

While building costs may be easing, Melbourne still faces significant construction labour shortages.

The ongoing struggle to find enough skilled workers to complete projects continues to:

• Put upward pressure on construction costs.
• Drag out project timelines and completion rates.

With many construction companies going bankrupt post-COVID, insolvencies remain a serious concern for the industry.

Government Initiatives to Boost Construction

Despite these challenges, the Victorian Government’s plan to build 50 higher-density living centres across metropolitan Melbourne is expected to provide a much-needed boost.

These living centres aim to:

• Stimulate the construction and property development industries.
• Help address the housing shortage in Victoria and across Australia.

The Rise of Build-to-Rent Developments

The burgeoning build-to-rent sector is another factor driving stability in Melbourne’s residential property market.

Build-to-rent developments:

• Offer long-term rental options as an alternative to the expensive traditional apartment market.
• Provide secure rental housing for those who prefer renting over home ownership.

With the certainty and security of these projects, Melbourne’s construction industry is finally beginning to recover from the uncertainty of the post-COVID years.

A Stable Future for Melbourne’s Construction Sector

With easing material costs, government support, and a shift towards sustainable development, Melbourne’s construction sector is set for a stable period of growth—provided the industry can successfully address its labour shortages.