The latest Productivity Commission report, Housing construction productivity: Can we fix it?, delivers a wake-up call to the residential construction sector. For years, builders have called for change, and now the numbers confirm it: we aren’t going to meet housing demand without improving productivity.

Over the past 30 years, physical productivity has dropped by 53%, and labour productivity has fallen by 12%. Meanwhile, construction costs have jumped 40% in the last five years, and build times have stretched by up to 80% over the last 15 years.

So, what’s causing the problem? The report identifies four major obstacles:

• Slow and complex approvals that delay projects
• Lack of innovation holding the sector back
• Limited scalability preventing efficiency
• Workforce shortages straining supply

Government red tape and policy failures

The report also highlights how poorly coordinated regulations and inconsistent policies across states have added unnecessary costs and delays. Governments have focused on planning and zoning, but they’ve ignored productivity barriers like slow build times and high costs.

Master Builders Australia welcomes the report but wants further investigation into industrial relations reforms, especially enterprise agreements and independent contractor laws, which may be worsening workforce challenges.

The Productivity Commission’s recommendations

The Commission suggests practical steps to boost construction productivity:

1. Streamline planning and approvals to speed up projects.
2. Refine the National Construction Code to remove unnecessary costs.
3. Remove barriers to innovation and encourage new building methods.
4. Improve workforce flexibility through occupational licensing reform, migration support, and better apprentice training.

Master Builders takes action with ‘Construct Your Career’

While waiting for governments to act, Master Builders Australia has launched the ‘Construct Your Career Guide’ - a resource designed to attract new talent to the industry. The guide breaks down career paths, earning potential, and opportunities across trades, engineering, construction management, and more.

CEO Denita Wawn sums it up:

“Every day we drag our heels on fixing industry productivity, we drag out the housing crisis. There’s no silver bullet, but governments must act now.”

With demand for housing at an all-time high, fixing productivity isn’t an option - it’s a necessity. Will governments take action? Time will tell.

Read full Master Builders Media Release here: