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28 September 2026
The Reserve Bank has today raised interest rates to 4.6 per cent.
Master Builders Australia CEO Denita Wawn says this escalation combined with other challenges further erodes the financial viability of many prospective home building projects.
“Australia is sleepwalking into a severe building and construction downturn at precisely the time we need to be building more.
“Today’s rate increase will prevent developers and builders proceeding with some of the projects they need to progress. Others may still go ahead, but on a reduced scale.
“Interest rates are now at their highest level in 15 years. Combined with the acceleration of building materials prices and continued labour shortages, the cost of creating new homes far exceeds their likely selling price in many situations. This means they just won’t end up getting built.
“The RBA put rates up today because inflation is simply too high. Our economy doesn’t have enough room to grow, a situation which inflames inflationary pressures. We need to enhance our economic capacity by expanding our construction workforce and recharging productivity.
“One has to question the policy decisions that have contributed to where we are today. The current direction will not improve housing supply, deliver the infrastructure or the buildings we need. In fact, it risks making the situation worse,” said Ms Wawn.
Independent modelling shows the Federal Budget alone over the next four years will cause:
- 10,700 fewer new homes
- Up to $10 increases to rents
- 4,700 less construction jobs
- $1.05 billion less in GDP
Those figures don’t take into account the other economic challenges currently being experienced, which are deteriorating the outlook even more.
Media contact: Dylan Hafey, Adviser, Media & Government Relations
0497 330 064 | dylan.hafey@masterbuilders.com.au