Australia’s home building sector faces a reality check. Master Builders Australia Chief Executive Denita Wawn has delivered a stark warning: without immediate reforms, Labor’s ambitious plan to build 1.2 million homes by 2029 will fall short.

Fresh figures from the Australian Bureau of Statistics (ABS) underline the urgency. Just 179,000 dwellings were completed in the 12 months to March 31—around 60,000 short of Labor’s annual goal of 240,000 new homes. The March quarter saw completions dip 4.4 per cent from the December quarter to 43,517.

For first-home buyers already under pressure, the implications are severe.

“It’s Too Costly to Build”

In a blunt assessment on Sky News Business Now, Ms Wawn said the private market has effectively tapped out.

“Increase of building costs over the last five years has been significant and our productivity has declined and as a consequence, the private market has simply said it is too costly to build,” she said.

The demand for housing remains strong, but it’s not translating into starts or completions.

“The demand’s there, it’s just latent. So we’ve got a productivity issue that we need to address.”

Costs Soaring, Builders Under Pressure

Construction costs have spiked by around 20 per cent in five years, driven by materials, labour shortages, and regulatory complexities. The result? Many builders are operating at a loss just to maintain cash flow.

“That needs to change and private investment is the way we will resolve the shortage we have in housing at the moment,” Ms Wawn said.

Government spending alone won’t bridge the gap. Private sector confidence must return, but right now, investment is being throttled by cost blowouts and red tape.

Labor’s Housing Target: Achievable or Aspirational?

The government insists its 1.2 million-home pledge is realistic, but Treasury advice leaked earlier this month suggests otherwise. The department reportedly warned the target “will not be met” without a “coherent and well-prioritised” housing agenda.

Ms Wawn agrees the target is achievable—but only if systemic issues are addressed.

“We need access to finance and we need to ensure that we’re being as efficient as possible. We think it can be achieved, but it does need everyone realising the seriousness of the issue and implementing the changes that we know are necessary.”

What Needs to Change?

Ms Wawn laid out clear priorities:

• Planning Reform: “We need easier, simple planning approval systems.”
  
• Stability in Regulation: “We need a construction code that makes sense and stop making so many changes to it so often.”
  
• Infrastructure Readiness: “We need to ensure that we have utilities in our building site so we can then get building the actual construction of the homes.”
  
• Skills and Workforce: “We need to focus on getting more people into the sector.”
  

These measures, combined with streamlined finance access, could re-energise private investment and unlock the latent demand Ms Wawn references.

The Bottom Line

Labor’s housing challenge is not just about policy ambition—it’s about execution. With productivity falling, costs rising, and investor confidence waning, the government must work with industry to create conditions that make building viable again.

As Ms Wawn cautions:

“We cannot rely on government investment alone.”

The message is clear: fix the fundamentals or risk missing the target—and failing an entire generation of home buyers.

Author: TGB Editorial