Regional builders warn of worsening housing shortages amid planning and workforce challenges
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Photo by Ron Lach
Small building businesses across regional Australia are sounding the alarm over deepening housing shortages, urging governments to tackle persistent planning delays, workforce shortages, and escalating compliance costs. These pressing issues were highlighted in the HIA 2026 Small Business Conditions survey, as detailed by Simon Croft, Chief Executive of Industry & Policy at the Housing Industry Association (HIA).
“The survey highlights the unique pressures facing regional small businesses, which are critical to delivering new homes and supporting local jobs,” Mr Croft explained. He pointed out that unlike their urban counterparts, regional builders lack the large workforces and financial buffers necessary to withstand prolonged delays.
The survey revealed that 68 per cent of small builders have contemplated scaling back operations or shutting down entirely due to bureaucratic red tape. Furthermore, 73 per cent of these builders do not plan to hire additional staff in the coming year, despite the persistent demand for housing.
A significant bottleneck identified in the survey is the planning approval process. “Planning delays are a major constraint on regional housing delivery, with 88 per cent of builders reporting approval times longer than eight weeks, and one in three waiting more than six months before construction can begin,” Mr Croft stated. In regional towns, such delays can have cascading effects, stalling businesses for months, disrupting cash flow, and impacting local employment and housing availability.
Workforce shortages compound these challenges, with 67 per cent of small builders struggling to recruit or retain skilled workers. “Regional builders can’t just pull labour from the next suburb,” Mr Croft noted. “They rely on local trades and apprentices, and when those workers aren’t available, projects slow or stop.”
The survey also highlighted regional variations in the pressures faced by builders. In New South Wales, 70 per cent of small builders cited the time and cost of planning approvals as a major concern, while nearly two-thirds grappled with finding skilled labour.
In Victoria, over 85 per cent of small builders identified rising insurance costs as a significant challenge, further squeezing already tight profit margins. Queensland’s regional builders are experiencing some of the most severe workforce shortages in the nation, with nearly eight in ten reporting difficulties in securing skilled workers.
Western Australia is not immune to these pressures, with two-thirds of small builders indicating that the high cost of skilled labour is hampering their ability to take on new projects, particularly in regional centres. South Australian builders reported that more than three-quarters are struggling to source skilled labour, directly limiting the number of homes they can construct annually.
“The findings reinforce the need for targeted reforms to support regional small businesses and lift housing supply,” Mr Croft concluded. The call for reform comes as regional builders face an uphill battle to meet housing demands amidst these multifaceted challenges.
The HIA survey underscores the critical role that regional builders play in local economies, not only in providing housing but also in sustaining jobs. As governments deliberate on policy reforms, the voices of these small businesses highlight the urgent need for efficient planning processes, workforce development, and cost management to ensure the viability and growth of regional construction sectors.