Statement on RBA’s decision to lift interest rates from Master Builders Australia CEO Denita Wawn

5 May 2026

Today’s decision to lift interest rates by another 25 basis points to 4.35 per cent and the economic impacts from the Middle East conflict will make conditions more challenging for builders.

Australia’s inflation rate is closing in on a three-year high, with housing continuing to be the largest driver of price pressures.

Over the year to March 2026, the cost of a newly built house rose by 4.1 per cent. This means that building a new detached house is now 48.6 per cent more expensive than it was right before the pandemic and there have been further cost escalations over recent weeks.

We’ve also seen new home building approvals drop by more than 10 per cent during March.

These mounting challenges undermine market confidence and threaten pipelines across all three construction sectors.

This makes the policy settings in the federal budget even more pressing. Australians need an efficient and affordable pipeline of homes, infrastructure and buildings that they rely on.

Urgent measures that would support building and construction activity include accelerated depreciation for capital works, increases to the Instant Asset Write Off, a reduction in unnecessary red tape by at least 25 per cent, investment in the construction workforce as well as in enabling infrastructure.

Builders know that improving housing affordability means growing supply, not simply shifting demand around. The private sector already delivers more than 95 per cent of new builds, and it must be supported to do even more.

Master Builders Australia’s budget roadmap can be found here.

Media contact: Dylan Hafey, Media Advisor

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