Master Builders raise productivity concerns as home building lags government target
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More news: Master Builders Australia has highlighted that new dwelling commencements are 25% behind the rate required to meet the government’s 1.2 million target agreed to under the National Housing Accord, although the latest data leaves “room for optimism”.
What they said: Master Builders Australia chief executive Denita Wawn said home building activity in the March quarter 2025 posted the highest total commencements since the June quarter 2022, driven by a “sharp lift in higher density home building”.
Despite the latest figures “allowing room for optimism that the worst is now behind us” Wawn flagged that house building is still slower than what is required to meet the target to build 1.2 million over five years.
“Since the commencement of the Housing Accord, just 134,466 new dwellings have commenced. To stay on track, we would need around 60,000 starts per quarter – we are about 25 per cent short of that pace,” Wawn said.
Wawn said the federal government’s economic reform roundtable is an opportunity “to fix the biggest pinch points” in the building and construction sector, which has seen productivity in the sector fall 18% over the last decade.
Home building expanded by 11.7% in the March quarter
The news: The rate of home building commencements picked up in the March quarter 2025, growing faster than in the December quarter 2024 and beating figures from the same period in 2024, according to the Australian Bureau of Statistics.
The number of homes completed over the quarter fell to 43,517, from 45,521 in the prior quarter.
The numbers: The total number of dwelling units commenced in the March quarter 2025 reached 47,645, representing an increase of 11.7%, in seasonally adjusted terms, compared to the December quarter 2024. It was the fastest quarter-on-quarter rate of dwelling commencements since the March quarter 2023.
The March 2025 figure is made up of 27,923 new private sector houses and 18,161 new private sector other residential, representing a 6.3% and 21.8% quarter-on-quarter increase respectively.
The figures also represent a 17.3% increase on a year-on-year basis and is the third consecutive quarter that has posted a year-on-year increase.
However, it is still 28.3% below the 2021 June quarter peak of 66,429 total new dwellings commenced in seasonally adjusted terms.
The context: In a brief issued after the 2025 federal election, Treasury advised the Albanese government that its pledge to tackle the housing crisis by facilitating the build of 1.2 million homes over five years “will not be met”.
The information was mistakenly disclosed in response to a freedom of information request sent by ABC News, which also raised the potential to change it and crafting a “coherent and well-prioritised” housing agenda.
KPMG urban economist Terry Rawnsley said in a media statement that the new building commencements would provide a “much-needed boost” to supply and attributed the rise to changes in planning processes “beginning to flow through the system”.
The sources: The Australian Bureau of Statistics, ABC News, Master Builders Australia media release
