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30 September 2026
Today, the ABS released three sets of data showing:
- New home building approvals dropped by 6.1 per cent in August;
- Inflation jumped to 4.0 per cent, it’s highest in 3 months;
- Engineering construction activity fell by 4.7 per cent during the June 2026 quarter.
Master Builders Australia CEO Denita Wawn said construction demand remains high, however the current environment is not conducive to people wanting to invest in property due to a combination of poor policy decisions in the Federal Budget, higher construction costs, continued interest rate increases and the Middle East conflict. Project feasibility is simply not stacking up at a time when we should be turbo charging building.
“The warning signs are now appearing across the board.
“Modelling confirms that the Budget will deprive us of many new homes over the years ahead and force rents even higher.
“The Federal Government must come to the table and work with industry to turn this abysmal environment around. Builders are ready to go; they just need the Federal Government to deliver the right policy settings.
“We must make it less expensive to carry out building work. Cost deteriorations in our industry add to price pressures across the rest of the economy. However, this means there’s an opportunity to win the war against inflation by first neutralising the pressures driving up construction costs. This can only be done through cutting regulation, expanding our workforce and reigniting productivity growth across the building and construction industry.”
Master Builders Australia Chief Economist Shane Garrett said today’s figures paint a worrying picture for building and construction.
“Building approvals continue to move in the wrong direction at a time when Australia desperately needs more housing. Weak approval numbers today mean fewer homes getting built tomorrow. Even though detached house approvals are still going up, it is hard to see this continuing for much longer against such a difficult economic backdrop.
“Inflation remains a major challenge for our industry. Higher costs continue to place pressure on builders, developers and consumers, while also reducing the likelihood of interest rate relief in the near term.
“Engineering activity is a key indicator of confidence and investment across the broader construction sector. Today’s result highlights the fragile conditions facing the industry and the need for policies that encourage private investment rather than discourage it,” said Mr Garrett.
Media contact: Dylan Hafey, Adviser, Media & Government Relations
0497 330 064 | dylan.hafey@masterbuilders.com.au