Housing construction weakness exposes poor timing of Budget tax hikes

27 May 2026

Today’s ABS Construction Work Done data showed that total construction rose 3.4 per cent in the first quarter of 2026, while housing construction weakened.

The main driver was engineering construction, which increased 6.9 per cent while residential activity fell by 0.6 per cent. This marks the first quarterly decline in residential activity since June 2025.

Master Builders Australia CEO Denita Wawn said that while there are some positives in today’s data, the residential decline is concerning.

“The impacts of the Middle East conflict, interest rates and the Federal Budget’s tax hikes on housing and construction investment will continue to make matters worse.

“Builders are facing a range of challenges, including supply chain disruptions, workforce shortages and red tape. Even prior to the Budget changes, the National Housing Accord is forecast to be over 200,000 homes short of target.

“Now is not the time to make the job even harder, with Treasury expecting that the tax hikes on housing will result in 35,000 fewer homes. We urge the Parliament to work together to ensure the Budget legislation increases, not decreases, housing supply,” said Ms Wawn.

Media contact: Dylan Hafey, Media Advisor

0497 330 064 | dylan.hafey@masterbuilders.com.au