Australian housing targets under more pressure says survey

Friday 13 Feb 2026

 
Australia’s small businesses are warning that housing supply will continue to fall short of targets unless all tiers of government urgently address rising regulatory costs, planning delays and workforce shortages, according to the Housing Industry Association (HIA) 2026 Small Business Conditions Report.

The 2026 Small Business Conditions Report  was launched this week in Canberra and is a survey of HIA members that work in all areas of the building sector and that identify as a small business. 

“This report is not only a gauge of the level of sentiment in the small business sector but is also a measure of how the home building sector may be performing from 2026 onwards,” said HIA Managing Director, Jocelyn Martin.

“The report paints a clear picture of a small business sector under pressure, despite strong demand for new housing. Small building businesses are the engine room of Australia’s home building industry, but they are being asked to do more with less - facing rising insurance premiums, growing compliance obligations and planning delays that are stretching cashflow and eroding confidence. 

“The survey found 68% of respondents have considered scaling back or closing their business due to red tape and compliance burdens, while almost three-quarters do not expect to take on additional staff in the year ahead.

“Planning delays are a major barrier to productivity, with 88% of small builders reporting approval timeframes exceeding eight weeks, and one in three experiencing delays of more than six months.

“For small businesses, time is money and lengthy approval processes mean higher holding costs, delayed starts and increased financial risk, which reduces the number of homes that can be delivered.

“The survey also highlights persistent workforce challenges, with 67% of small builders reporting difficulty recruiting or retaining skilled workers, limiting their ability to expand operations or take on new projects. 

“Compliance pressures continue to mount, with more than half of small builders spending at least five hours a week on regulatory tasks, and nearly one-third spending more than ten hours.”

Other findings included:
  • 59% indicated they do not expect to have a more profitable year in 2025/26 than the previous year.
  • 63% of respondents said that NCC 2025 changes had either a moderate or major impact on their business.
  • 88% of respondents reported having an increase in personal stress as a result of increasing compliance burdens and red tape.
  • 56% of small businesses having hired new, or redeployed existing staff, to manage administrative or regulatory tasks.
“Streamlining planning systems, reducing compliance burdens and providing greater regulatory certainty would immediately improve productivity across the small business sector. Targeted support for apprentices, skills pathways and technology adoption would help small builders expand their workforce and lift output.

“With the right policy settings, small building businesses will play a central role in delivering more homes, faster, but without reform housing supply will continue to fall short,” concluded Ms Martin.

Source: Housing Industry Association


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