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27 March 2026
Master Builders Australia’s industry forecasts released today show that across the industry’s three sectors, we are likely to see more construction activity across the non-residential and civil sectors over the next five years compared with the past five years, albeit softening in the outer years.
In non-residential building forecasts, $377.5 billion worth of construction is projected up to 2029-30, a 21.9 per cent increase compared to the past five years. In civil construction, it is projected that $769.4 billion worth of engineering construction activity will get delivered across the country, up 20.6 per cent compared to the previous five years.
However, the prospects for new home building have diminished since previous forecasts six months ago.
Master Builders Australia Chief Economist Shane Garrett explained that, following tougher economic conditions, these latest forecasts expect 995,894 new home starts over the five years of the National Housing Accord, down from 1,019,818 last September.
“The goal of 1.2 million new homes before the end of the decade is drifting further away, with a 204,000-home shortfall now predicted.
“Labour shortages, interest rate and inflationary pressures, productivity decline and the cost of building materials have all continued to hamper the building and construction industry’s capabilities to deliver,” said Mr Garrett.
It is sobering to note that these forecasts do not take into consideration the recent interest rate hike or the ongoing consequences of the conflict in the Middle East which will undoubtably exacerbate the worsening supply story.
As we saw during COVID, due to fixed price contract arrangements, most builders are being forced to absorb the cost increases from the past fortnight. This could flip many projects from being profitable to loss making for the builders concerned.
Master Builders Australia CEO Denita Wawn said the forecasts were already far from where we need to be and that the recent instability will only make the situation worse.
“The industry doesn’t want a repeat of COVID and with the federal budget only weeks away, the policy solutions are now even more urgent including responsible tax incentives, elevated workforce and infrastructure investment and a simpler regulation system.
“The true test for May’s federal budget is “will the budget boost new housing and other construction or reduce it?” said Ms Wawn.
Master Builders Pre-Budget Submission policy roadmap includes:
- Workforce: Investing in all apprentice training pathways and embracing skilled migration and the skills we need from overseas.
- Infrastructure: Increasing private and public investment in housing enabling infrastructure such as roads, sewage and community facilities.
- Taxation settings: Increasing and making permanent the Instant Asset Write Off to $150,000 and offering accelerated depreciation for capital works.
- Regulation: streamlining the National Construction Code, committing to a radical red tape reduction across the board by at least 25 per cent, and appropriately resourcing the industry’s six key regulatory agencies.
The federal budget cannot afford to embrace proposals to reduce property investment incentives that would decrease new housing supply. Policy settings must be holistic and any proposed change to these settings must result in a net increase in supply.
The current impacts to the supply chain and these new construction forecasts are a renewed call to action for the next budget to deliver measures that will support a robust, productive and profitable construction industry.
Media contact: Dylan Hafey, Media Advisor
0497 330 064 | dylan.hafey@masterbuilders.com.au