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Australia’s building sector sees tentative recovery signs, but deep housing shortages and policy gaps require stronger political follow-through.
Master Builders Australia’s latest industry forecasts revealed “cautious optimism” for the building and construction sector, with early signs of a housing market recovery.
However, the nation remains 160,000 homes short of the National Housing Accord target, highlighting the urgent need for co-ordinated government action to unlock the industry’s full potential.
The forecasts, covering the five-year Accord period, project around 1.04 million new home commencements – well below the 1.2 million homes needed to address Australia’s ongoing housing crisis.
Denita Wawn, CEO of Master Builders Australia, said: “While the latest data gives us cause for cautious optimism, now is not the time for complacency.
“The housing market is beginning to show signs of life after a difficult two years, and with inflation and interest rates easing, the conditions are right to support greater investment in new housing. But we need all levels of government to step up.”
Master Builders said that despite bipartisan recognition of the crisis, current efforts remain too fragmented to deliver lasting change.
“We’re still tinkering at the edges. It’s time to take the foot off the brake and put in place the reforms and investment needed to properly unlock supply,” Wawn said.
The Albanese government’s planning reform push, including the National Planning Reform Blueprint, has been welcomed by Master Builders.
However, the organisation stressed the importance of complementary commitments to improve home ownership and expand affordable and social housing.
“We welcome both parties’ support for first home buyers, but we remain concerned by the lack of a clear Coalition plan for affordable and social housing,” Wawn said.
“At the same time, Labor must do more to address the real costs of employing and training apprentices – particularly for the small businesses that make up 98 per cent of our industry.”
The Coalition’s proposed wage subsidy and apprentice payments are seen as a practical response to growing skills shortages and labour cost pressures.
“These are targeted policies that recognise the pressure small and medium businesses are under. Labor should match this level of support,” Wawn said.
According to Master Builders, around $1.6 trillion in total construction work was completed across the five years to 2029–30, representing an average increase of 21.5 per cent over the previous five-year period.
Non-residential building has performed steadily in recent years, but future activity is expected to remain relatively flat, with about $301 billion in work forecast – an average of 4.5 per cent more annually than the last five years.
Social, cultural, and recreational projects are tipped to grow in importance, while retail, commercial, and industrial building activity may slow.
This article was originally featured in Real Estate Business's sister brand, Broker Daily.
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