Housing construction productivity: Can we fix it?
Summary
This article examines the decline in productivity within Australia's housing construction sector and proposes policy reforms to enhance efficiency and address housing affordability.
Why It Matters
The article highlights a critical issue affecting housing affordability in Australia, revealing that productivity in housing construction has stagnated for decades. By identifying key barriers and proposing actionable reforms, it aims to guide policymakers in improving the sector, which is essential for meeting housing demands and enhancing living standards.
Key Takeaways
- Housing construction productivity has declined significantly over the past 30 years.
- Barriers to productivity include complex regulations, lack of innovation, and workforce challenges.
- Proposed reforms focus on streamlining approvals, reviewing building regulations, and enhancing workforce flexibility.
Housing construction productivity: Can we fix it?Research paperReleased 16 / 02 / 2025This paper examines productivity growth in the housing construction sector, with the Commission’s estimates telling a story of decades of poor performance. It provides policy directions for improving construction productivity by reducing regulatory burden, streamlining and speeding up approval processes, supporting innovation and improving workforce flexibility to help turn the dial on this persistent policy challenge.Housing Construction (PDF 1.1 MB)Housing Construction (DOCX 7.4 MB)Data tables (XLSX 105.1 KB)Watch the videoVideo transcriptWe know that housing affordability is a big concern for many Australians and productivity in the building sector makes a difference to how quickly and cheaply we can add to the supply of houses and apartments. That's why we decided to identify practical things that governments can do to improve housing construction productivity.But first the bad news... Dwelling construction productivity has been in the doldrums for at least 30 years. That means we get about half as much house per hour work and we did three decades ago even after we adjust for the fact that our houses are bigger and better quality, construction productivity is 12% lower now.Many other countries share Australia's housing productivity woes. So why is productivity in housing construction going backwards?Housing construction is complicated and there are a range of barriers to greater effic...
