Knowledge Centre

March 30, 2026

The Gap Between Targets and Tools: Why Australia’s Housing Goal is Slipping Away

Australia is currently facing a “math problem” that affects every renter and hopeful homebuyer in the country.

Recently, Master Builders Australia (MBA) released a sobering update: the national goal to build 1.2 million homes by the end of the decade is drifting out of reach. Current forecasts suggest we will fall short by about 204,000 homes.

But why is it so hard to just “build more houses”? To understand this, we need to look at the “Four Pillars of Pressure” currently squeezing the construction industry.

1. The Labor Shortage: A Missing Workforce

You can’t build a house without builders. Australia is currently facing a massive deficit in skilled tradespeople—electricians, plumbers, and carpenters. As older workers retire, there aren’t enough new apprentices entering the system to replace them.

The Educational Takeaway: This is why the MBA is calling for increased investment in apprenticeship training and skilled migration. Without “boots on the ground,” a housing target is just a number on a page.

2. The Inflation Trap & Interest Rates

Construction is a capital-intensive industry. When interest rates rise, it becomes more expensive for developers to borrow money to start new projects. At the same time, the cost of materials (timber, steel, concrete) has skyrocketed due to global supply chain issues and international conflict.

The “Fixed-Price” Problem: Many builders are stuck in “fixed-price contracts” signed a year or two ago. If the cost of wood goes up 20% after the contract is signed, the builder has to absorb that cost. This is turning profitable projects into losses and forcing some companies out of business.

3. Productivity and Red Tape

Efficiency in the building sector has actually declined. Complex planning approvals, “red tape,” and inconsistent regulations between different states make it slow and expensive to get a project from a drawing board to a finished building.

The MBA Proposal: The industry is calling for a 25% reduction in red tape to speed up the delivery of new homes.

4. Enabling Infrastructure

A house isn’t just four walls; it needs a road to reach it, pipes for sewage, and wires for electricity. Often, developers are ready to build the houses, but the “enabling infrastructure” (the pipes and roads) isn’t there yet.

The Solution: Master Builders is urging the government to increase funding specifically for the “boring” stuff—the sewers and roads that allow a suburb to actually function.

The Silver Lining: Not All Construction is Slowing

Interestingly, while residential housing is struggling, civil engineering (roads, bridges, railways) and non-residential building (offices, hospitals) are actually seeing growth. This creates a “tug-of-war” for resources. If a massive government bridge project is hiring every available crane and engineer, there are fewer left over to build your local apartment complex.

What to Watch: The May Budget

The MBA has made it clear: the upcoming Federal Budget is the “true test.” For the housing target to stay alive, the industry is looking for:

Tax Incentives: To make it more attractive to invest in new builds.
Workforce Investment: To get more young people into trades.
Streamlined Regulation: To cut the time it takes to get a “Yes” from the local council.