Regulatory inefficiencies, skills shortages, and rising costs seen as key challenges
Australia’s construction industry groups have welcomed the Productivity Commission’s latest report, which highlights critical challenges in housing construction productivity and recommends reforms to address supply constraints.
The report, Housing Construction Productivity: Can We Fix It?, underscores long-standing concerns about declining efficiency in the sector. Over the past 30 years, physical productivity in construction has fallen by 53%, while labour productivity has declined by 12%. Rising costs and longer build times have further strained the industry, with construction expenses increasing by 40% in the past five years and residential build times extending by up to 80% over the last 15 years.
The commission identified four key challenges: slow and complex approvals, a lack of innovation, limited scalability, and workforce shortages. It also criticised regulatory inefficiencies, inconsistent policies across jurisdictions, and rules that hinder technological advancements in the industry.
“Productivity is more than an economic buzzword,” said Denita Wawn (pictured left), chief executive of Master Builders Australia. “Every day, we drag our heels on tackling the challenges faced in the industry, the longer we drag out the housing crisis.”
The Property Council of Australia echoed this sentiment, with chief executive Mike Zorbas (pictured right) calling the report “a love letter to better housing supply.” He emphasised the need for coordinated development strategies, better skills recognition, and regulatory improvements.
“The sooner we embrace the Productivity Commission’s solutions, the sooner we can eliminate Australia’s housing deficit,” Zorbas said.
The commission’s recommendations include streamlining planning and approvals, addressing barriers to innovation, and improving labour market flexibility through licensing reforms, migration policies, and better support for apprentices. The report also calls for enhanced funding for the Australian Building Codes Board to ensure a more consistent adoption of building regulations across states.
Alongside the report’s release, Master Builders Australia launched its Construct Your Career Guide, a resource aimed at addressing skills shortages by promoting career pathways in construction. The guide provides insights from industry professionals across various trades and roles, offering guidance on salaries, career progression, and training opportunities.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
