Challenges in Meeting National Housing Targets
An insightful report from the Australian Housing and Urban Research Institute (AHURI) has identified market volatility as a primary barrier to increasing housing construction in Australia. RMIT University led the research, with Associate Professor Andrea Sharam at the helm, highlighting the impact of boom-and-bust cycles.
Australia is ambitiously aiming to construct 1.2 million new homes by June 2029 through the National Housing Accord. Yet, frequent market fluctuations have significantly impacted labour availability, costs, timelines, and quality across the construction sector.
In a statement, Andrea Sharam remarked, “Our ultimate conclusion was market volatility presented the most significant risk for builders, and the biggest constraint on construction output and quality.” The research spanned both detached and high-rise housing, revealing significant demand swings.
Impact of Market Swings
During boom years, the number of detached homes under construction can increase by 50,000, whereas downturns might slash this number by 20,000. The apartment sector saw construction surge by almost 300% during the 2010s, but this was followed by a 30% decline due to regulatory changes and decreased foreign investment.
Sharam explained that boom conditions lead to spikes in costs, labour shortages, and supply chain disruptions. In contrast, downturns cause a loss of labour, wage suppression, and stifled innovation. The sector’s fragmented structure further reduces productivity.
The report emphasizes the need to reduce market volatility, enhance workforce development, and enforce building codes to boost housing construction. Sharam advised against policies that stimulate demand, warning they could replicate boom conditions.
The AHURI report, titled ‘Overcoming construction constraints for the supply of new detached and high-rise housing,’ involved 19 researchers from seven universities. It calls for comprehensive reform to meet the National Housing Accord’s objectives.
Small and medium-sized builders deliver half of the apartments and most detached homes, relying on temporary contractor teams. This setup complicates skill transfer and worker retention, according to the report, which also identifies low margins and inadequate enforcement of building codes as barriers to innovation.
“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.
Last updated: 10 June 2026, 11:15 am
