This inquiry provides an examination of the Australian construction sector’s ability to deliver both detached and high-rise housing. It analyses construction workflows, markets, regulation, workforce, technologies and supply chains. The housing construction industry in Australia is at crisis point. The rate of Australia’s detached housing output has been largely static since at least 1980. Apartment construction can lift in response to demand, but output is volatile. There is no overarching strategy aimed at addressing housing construction constraints. This inquiry provides eight interconnected options for policymakers and industry.

Key points

• Market volatility is the most significant factor driving constraints in the Australian housing construction sector.
• In both detached and high-rise construction, boom conditions result in supply chain pressures, cost inflation, labour shortages and extended completion times.
• Booms also result in the entry of marginal operators and under-skilled workers, pressure to cut corners, and heightened risk of insolvency.
• Downturns are similarly challenging, and result in some permanent loss of labour, wage suppression, loss of knowledge and innovation, and firm exits. 
• Inadequate enforcement of regulation in both sectors means builders may prioritise construction cost and time over housing quality, giving rise to unacceptable levels of defects.