Our recent analysis captures this complicated picture on the ground in Australian housing construction—a sector increasingly beset by costs and timetable blowouts. From 2020 to 2025, time to build a home was 34 percent longer on average. Looking ahead, this jump makes clear the ongoing struggles of the construction sector. In the 2024-25 fiscal year, just 174,271 new homes were built by those homebuilders. They undertook to deliver 65,000 fewer homes than their goal of 240,000 homes each year. This gap highlights some deep-rooted problems at play as America’s need for housing grows while the available supply languishes.
Although overall construction duration has experienced a significant uptick, recent data shows a reversal in the last few months. In fact, for the first time since the pandemic, the media timeframes for construction have started to shrink. Even on the positive side, the big picture is very bad. Construction timeframes are still taking twice as long as they did ten years ago.
Rising Costs Impacting Construction
Construction material costs have jumped by 35 percent in the past five years. This sudden spike has created even more pressure on builders. Increasing costs have forced most contractors to reconsider the length of their projects and/or cost of their projects. This change has a direct effect on the pace and production of new builds nationwide.
Denita Wawn, Chief Executive of Master Builders Australia called for a government intervention to tackle these headwinds.
“The capacity to turn back to pre-COVID days is totally up to governments now in terms of assisting the industry in resolving its skills problem and also speeding up and providing additional resources into enabling infrastructure.” – Denita Wawn
Wawn’s remarks point to the difference government support can make as an effort to restabilize the construction industry. As costs grow, it will take a coordinated approach among all stakeholders to turn the tide on what’s happening today.
Changes in Construction Timelines
Topping the list of challenges are soaring material costs. Some parts of the housing market are getting faster at building homes. It took an average of five fewer weeks to build a townhouse — just under 15 months on average. In comparison, the pace of apartment construction has only increased marginally, now requiring just shy of 33 months. This represents a 54.1 percent increase in processing times for apartments over the last 10 years.
It’s detached houses that are really in trouble. They are now being constructed at a pace that is 35.8 percent slower than 10 years ago. Construction time in Western Australia has increased by a staggering 71 percent from 2020 to 2025. This exorbitant spike underscores a larger pattern in the region’s fast-growing building sector.
As Daniel Wild from the Institute of Public Affairs put it, Crippling challenges have continued to haunt the sector.
“Certainly, any decrease is very welcome and it would tend to suggest there is something happening in terms of freeing up the industry, but overall it is a long way to go from where we were pre-pandemic.” – Daniel Wild
From this somewhat-glass-half-full point of view, there is good news to report. The industry still has a long way to go before it returns to its historical levels of efficiency.
Addressing Housing Demand
The chronic shortage in housing supply mainly due to overwhelming demand from migration pressures and lower interest rates. Wild points out that the increase in demand has strained an already stressed construction market.
“We know we have got a bit of a backlog of housing because we have had this surge of demand that’s largely been driven by migration, but also lower interest rates have also increased demand.” – Daniel Wild
Australia wants to solve chronic housing problems. The country has adopted an ambitious housing target of 1.2 million new dwellings by 2029. Getting anywhere near that goal will be contingent on addressing major obstacles like today’s labor shortages and material costs.
Housing analyst Duncan Maxwell was sharply skeptical about whether business as usual would be up to the task of meeting these challenges.
“I think there are some much bigger underlying trends that are causing those factors, and I don’t necessarily think pursuing business as usual will see a major transformation or a major change in the figures long term.” – Duncan Maxwell
