Builders face hiring challenges amid housing boom due to red tape and skills shortages
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Photo by El Bravo
Despite an ongoing housing boom, residential builders and trades in Australia are exercising caution when it comes to hiring new staff in 2026. This reluctance is not due to a lack of demand for housing, but rather mounting cost pressures, regulatory hurdles, and persistent skills shortages, as revealed by a recent survey conducted by the Housing Industry Association (HIA) among its small to medium enterprise members.
The survey, which sheds light on the current challenges faced by the construction industry, highlights a significant hesitance among builders to expand their workforce. “HIA research shows 73% of members surveyed do not expect to employ more staff this financial year, with only 27% planning to increase their workforce,” stated HIA Managing Director, Jocelyn Martin. Her remarks underscore the cautious stance of builders despite the thriving housing market.
One of the primary issues contributing to this cautious approach is the difficulty in recruiting and retaining skilled staff. According to the HIA survey, a substantial 67% of small business members report challenges in this area. Furthermore, 56% of respondents indicated that they have had to redirect staff time to manage regulatory and compliance requirements, which adds another layer of complexity to their operations.
“Builders are ready to bring more people into the industry, including apprentices and skilled trades, but current conditions make it difficult to do so with confidence. This is about managing risk and capacity, not a lack of work or willingness to employ,” explained Ms Martin. Her comments reflect the delicate balance that builders must maintain between meeting demand and navigating the obstacles that hinder workforce expansion.
The survey results also highlight the unique pressures faced by the residential construction sector compared to other industries. “These results contrast with more positive employment expectations in other sectors, highlighting the unique pressures facing residential construction,” Ms Martin noted. This disparity underscores the need for tailored solutions to address the specific challenges within the construction industry.
Training the next generation of skilled workers is another area that requires attention. “Training apprentices and developing skills takes time, stability and certainty. When businesses are dealing with delayed approvals, inconsistent regulation and rising costs such as insurance and workers compensation, it becomes much harder to invest in long-term workforce development,” Ms Martin emphasised. Her remarks point to the critical role that stability and streamlined processes play in fostering a skilled workforce.
The administrative and compliance burdens associated with hiring and training apprentices are particularly burdensome for small businesses, which often lack dedicated human resource managers. “The administrative and compliance burden for hiring, managing and training apprentices is also disproportionally higher on small businesses,” Ms Martin said, highlighting a key challenge that small enterprises face in contributing to workforce growth.
When asked about the current pressures facing their business, respondents ranked the availability and cost of skilled labour among the top five issues, at 62% and 61% respectively. These figures underscore the significant impact that labour-related challenges have on the industry’s ability to expand and meet housing demand.
In response to these challenges, the HIA is advocating for changes that would alleviate some of the burdens faced by builders. “HIA is calling for streamlined planning systems, reduced regulatory duplication, and stronger skills pathways to give builders the confidence to hire, train and retain more workers,” Ms Martin stated. Her call to action highlights the need for policy adjustments that would create a more conducive environment for workforce development.
“Getting these settings right is essential if we are serious about increasing housing supply. With the right policy environment, the home building industry can strengthen its skilled workforce, grow employment and play a leading role in addressing Australia’s housing needs,” Ms Martin concluded. Her vision for a more robust construction industry aligns with the broader goal of addressing the nation’s housing challenges.
As the housing boom continues, the need for skilled workers in the construction industry remains critical. However, overcoming the barriers of red tape and skills shortages will require concerted efforts from both industry stakeholders and policymakers to ensure that builders can confidently expand their workforce and contribute to Australia’s housing future.