The report also found the sector’s fragmented structure is holding back productivity.
Housing production relies on temporary contractor teams that disband after each project, and small and medium-sized builders continue to deliver half of apartments and most detached homes
According to the report, that makes it harder to transfer skills, retain workers and build long-term capability across the industry.
It also found low margins, limited financial buffers and inadequate enforcement of the building code reduces investment in training and innovation, while increasing pressure to prioritise cost and speed over quality.
“This paradox of being too busy to invest during booms, and too uncertain to invest during busts, creates a persistent barrier to industry-level improvement,” Sharam said.
The report argues that boosting housing construction will require broader reform across the sector, rather than focusing on a single bottleneck.
It points to three priorities in particular: reducing market volatility, strengthening workforce development and improving consistency and enforcement in the building code.
Sharam said governments should avoid policies that stimulate demand as they can mimic boom conditions and instead consider approaches such as social housing investment during downturns to help smooth construction cycles.
“Blaming individual factors, like the planning system, is the biggest myth we need to quash,” she said.
“The National Housing Accord aims to build 1.2 million homes by 2029, it will take significant system-level reforms to get us there.”
Organisations interested in partnering with RMIT researchers can contact research.partnerships@rmit.edu.au.
Overcoming construction constraints for the supply of new detached and high-rise housing is published by the Australian Housing and Urban Research Institute, with RMIT University co-authors Andrea Sharam, Ali Zolghadr, Louise Dorignon, Ron Wakefield and Ehsan Gharaie. (DOI: 10.18408/ahuri5334001)
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