Australia’s building and construction sector is facing a severe productivity slump, with Master Builders calling for urgent federal action to address compounding pressures and unlock housing delivery.
In a submission to the Productivity Commission’s consultation on productivity reform, Master Builders Australia has urged the federal government to support practical, industry-led changes to drive efficiency, reduce costs, and increase housing output.
“Australia’s productivity challenge begins with the built environment and so does the solution,” said Master Builders CEO Denita Wawn in a media release.
The warning comes amid a growing supply gap, with the National Housing Supply and Affordability Council forecasting just 825,000 net new homes by June 2029 – 79,000 short of Labor’s 1.2 million home target. This projected shortfall sits against a backdrop of record-high prices, soaring rents, and a persistent mismatch between housing demand and supply.
Productivity in the construction industry has dropped 18% over the past decade, while the cost of building a home has surged more than 40%.
Master Builders warned that without intervention, these trends will continue to erode the viability of new housing delivery.
“Boosting productivity is essential to building a better, safer and fairer building and construction industry,” Wawn said.
The submission highlighted the daily pressures facing builders – ranging from supply chain disruptions and rising material costs to rigid fixed-price contracts and shrinking profit margins.
Labour shortages, regulatory complexity, and inflexible workplace relations have further slowed progress. Small businesses, in particular, are struggling under the weight of growing compliance burdens and fragmented enforcement of existing rules.
“Our industry is under intense pressure, from broken planning systems to skills shortages, red tape, and regulatory creep,” Wawn said.
Master Builders is calling on the government to partner closely with the sector and pursue “bold, practical reforms that will make a real difference.”
“It’s not governments that build homes, it’s private businesses. What we need is for them to clear the path so we can get on with the job,” Wawn said.
Master Builders’ submission includes the following proposals:
“Productivity reform allows the industry to deliver quality outcomes more efficiently, reduce cost pressures, lift safety standards and ensure businesses of all sizes can thrive and compete on a level playing field,” Wawn said.
