Australia shouldn’t be failing to construct sufficient houses as a result of we lack the employees, the demand or the political consideration. We’re failing to construct sufficient houses as a result of we’ve quietly grow to be a lot worse at constructing them.
The Productiveness Fee’s analysis paper, Housing building productiveness: Can we repair it? discovered that the variety of dwellings accomplished per hour labored has fallen by 53 per cent since 1994–95.
Even after adjusting for the truth that houses are actually bigger and better high quality than they had been 30 years in the past, labour productiveness within the sector has nonetheless gone backwards by 12 per cent over the identical interval. And throughout the broader economic system, labour productiveness rose 49 per cent.
To place that hole in perspective, had the broader economic system declined as sharply as housing building, common Australian incomes could be round 41 per cent decrease than they’re right this moment.
That’s the structural drawback hiding beneath each headline about housing affordability.
Additionally it is why the nation is on monitor to fall round 262,000 houses wanting the 1.2 million nationwide goal by mid-2029, even with a Nationwide Housing Accord in place and important funding behind it.
The human penalties are already seen.
Based on Australia’s Productiveness Fee 2026 Report on Authorities Companies, 43 per cent of low-income renters receiving Commonwealth Hire Help are nonetheless in rental stress. Mission Australia stories 254,571 households on social housing waitlists, with 122,457 in best want on precedence lists, a 12 per cent annual improve.
One in three individuals who wanted disaster lodging final 12 months had been turned away as a result of there was nowhere to ship them.
A brand new mortgage holder now spends 50 per cent of their earnings on housing. Tenants spend 33 per cent. Saving a deposit takes greater than 10.6 years.
These are usually not market fluctuations. They’re the downstream results of a building sector that has not modernised on the tempo the nation wants.
The expertise to repair this already exists
The Productiveness Fee discovered that conventional builds can take as much as 12 months, whereas prefabricated builds might be completed in round 16 weeks.
Queensland’s QBuild Fashionable Strategies of Building program is utilizing modular methods to ship social and inexpensive housing at scale.
In February 2025, robotics and 3D printing expertise firm, LUYTEN, accomplished Australia’s first multi-storey 3D-printed home in outer Melbourne.
The construct took 5 weeks. A standard construct would have taken eight to eleven months.
FBR Restricted, an Australian robotics firm, has developed bricklaying robots that work persistently, safely and sooner than human groups. In Western Australia, one other firm, Contec, is utilizing 3D concrete printing to construct houses in days fairly than months.
Australian innovation on this house is genuinely world class. What’s lacking is the coverage structure to scale it.
Modular building accounts for lower than 5 per cent of Australia’s complete constructing output.
The obstacles are properly understood: regulatory complexity throughout States, financing methods that deal with modular houses otherwise from conventional builds, and an business construction dominated by small companies that battle to put money into innovation.
Analysis from the Committee for Financial Growth of Australia (CEDA) discovered that Australian building companies with 200 or extra staff generate 86 per cent extra income per employee than companies with 5 to 19 staff.
If Australian building matched the agency dimension distribution of producing, the business would produce AUD$54 billion extra income per 12 months with out a single extra employee.
That’s the equal of gaining 150,000 building staff in a sector at the moment struggling for labour.
Each one among these obstacles has been solved some other place.
New Zealand’s Auckland Unitary Plan upzoned three-quarters of residential land in 2016 and roughly doubled annual dwelling approvals inside six years, with rents on three-bedroom houses 26 to 33 per cent decrease than they’d in any other case have been.
Singapore’s Housing and Growth Board has round 80 per cent of the inhabitants in publicly constructed houses, at a scale and velocity Australia has not seen for the reason that Nineteen Fifties.
4 sensible reforms may change this image
At the moment, a producer in Melbourne has to re-certify its product merely to promote it in Brisbane – an pointless duplication of time and value.
So, an apparent first step to repair this might be finishing the nationwide certification framework for prefabricated and modular building, which is being developed by the Australian Constructing Codes Board. This might require all States to recognise licensed modules for streamlined approval.
Secondly, set a 30 per cent goal for contemporary strategies of building in all Commonwealth-funded social and inexpensive housing by 2028, rising to 50 per cent by 2032. Public procurement at this scale offers producers the value stability and pipeline confidence they should make investments.
Third, reform building financing in order that banks and lenders deal with accomplished modular houses on the identical valuation and mortgage phrases as conventional builds.
The present settings successfully penalise the expertise that may remedy the availability drawback.
And at last, restore social housing to 6 per cent of complete inventory by 2035, returning it to the degrees of the Eighties. The Nationwide Housing Provide and Affordability Council has recognized this because the medium-term goal wanted to deliver the system again into steadiness.
None of that is radical. Every lever has been examined someplace, by somebody, and the proof is printed.
The chance now could be to deliver these reforms collectively, fairly than treating them as separate workstreams.
The housing shortfall is right here, not someplace sooner or later.
Treating it as a productiveness problem, fairly than purely an financial one, opens up reforms which can be evidence-based, already examined and inside attain if there may be the political will to behave on them.
This text was first printed on 5 Could 2026 on Pursuit. Learn the unique article.
