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New home forecasts paint bumpy road ahead


Master Builders Australia has today released its latest building and construction industry forecasts to 2026-27 which shows the nation is falling behind in meeting its housing targets.

Overall housing starts sit below the 200,000 per annum needed between 2022 and 2025, dipping to its lowest over 2022-23 before rebounding in 2026-27 says Master Builders Australia CEO Denita Wawn.

“The current environment is a difficult one for the industry marked by rising interest rates, robust cost pressures and labour shortages. Despite this, the total volume of construction activity grew modestly (+1.5 per cent) to $215.1 billion during 2021–22,” said Ms Wawn.

“Whilst detached housing and renovations are stable or steadily growing off the back of the COVID stimulus boom, medium to high density remains hardest hit. This segment is more sensitive to interest rate fluctuations and is still recovering from the absence of inward migration over the past three years. Even before the pandemic, higher density dwellings were in decline.

“The challenge will be to make sure that we put downward pressure on building and construction costs to increase output.

“At present these challenges relate to supply of housing, workforce shortages – particularly key trades, bottlenecks in the market for key building materials and products, and increased costs from regulatory changes.

Alongside the forecasts, Master Builders has released its priorities on Delivering the housing needs for all Australians which outlines the key housing policy areas that need to be addressed by all levels of Government in order to achieve sustainable and affordable housing outcomes.

“The dream of owning and investing in housing is underpinned by a fair and equitable desire to improve social, economic and productivity benefits for the country. But in the current climate of economic uncertainty many are seeing this aspiration become too far out of reach with flow on effects across the economy.

“Struggles around housing affordability have persisted over many decades but with state, territory and federal governments committed to addressing the challenge, this key policy area needs to be at the forefront.

“While this represents a challenge, it also provides a real opportunity for bold reform to be advanced and for business and the communities in which they operate to be unshackled.

“The Federal Government has announced an ambitious plan for housing which is supported by Master Builders, and we will work closely with them to ensure the most effective levers are pulled and are practically implementable by the industry.

“To achieve better housing affordability in the future, changes need to be made to the way we do things, now and over the long-term.

“To address these pressures, Master Builders recommends responses around housing supply, the construction workforce, supply chain risk and cost pressures, simplifying regulatory settings, and providing taxation settings that support investment in housing and productivity,” said Ms Wawn.

Media contact
Dee Zegarac
National Director, Media & Public Affairs
0400 493 071



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