THE Housing Industry Association’s (HIA) National Policy Congress (NPC) has issued a clear warning that housing supply will continue to suffer unless governments remove barriers to construction and avoid policy settings that undermine investment.

The discussions drew the overall conclusions that housing delivery is under pressure from all sides — rising costs, global uncertainty, workforce shortages and an increasingly complex regulatory environment.

The NPC – made up of elected representatives from regions across Australia, together with the chairs of HIA’s eight specialist committees, staged its annual meeting on the Gold Coast on April 16. 
The industry has come from the summit united in its view that the only sustainable solution to Australia’s housing crisis is to build more homes – and that requires policies that support investment, productivity and confidence.

A range of emerging national policy issues were highlighted at the congress. 

 
International conflict and housing
The NPC reaffirmed its concern that ongoing international conflict continues to pose risks to residential construction activity in Australia. These risks include increased costs of materials, extended construction timeframes and greater uncertainty across housing markets.
With much of the residential building industry operating under fixed‑price contracts, builders — and the trades and product suppliers that rely on them — are exposed when costs increase unexpectedly.
This reinforces the need for all levels of government to avoid introducing policies that would further impede housing delivery, including additional taxation, regulatory burdens or administrative delays.
 
Taxation policy needs work
Members reaffirmed the residential construction industry’s strong opposition to changes to the taxation system that would de-incentivise investment in new housing.
The congress noted that more than 40% of new homes were financed by investors.

Recent independent research indicates that increasing capital gains tax, when applied to establishing housing only, will reduce investment in new home supply. Improving the supply of housing requires more investment in new home supply, not less.
 
Construction Code should be overhauled and modernised

The NPC recognised that Australia has a once-in-a-generation opportunity to reform the National Construction Code (NCC), which is the cornerstone document governing home building.
The NCC has become overly complex and has been tasked to solve an expanding number of policy issues. As a result, it is no longer fit for purpose.

Builders are strongly of the view that the time is right for a complete knock-down rebuild to restore it as a world leading code.
For those states implementing NCC 2025, NPC reaffirmed the position that the industry “needs room to breathe” from any further regulatory changes, and any changes should not occur until at least May 1, 2027.

Equally, any changes to workplace exposure standards for silica should be delayed. Furthermore, new building policy must evolve to keep pace with a range of changes, threats and opportunities.

AI comes into the residential building industry
The NPC recognised that artificial intelligence (AI) has an important role to play in enhancing productivity across the residential building industry.

AI has the potential to improve business operations and workplace practices, deliver on‑site efficiencies, achieve cost savings, and strengthen supply‑chain outcomes through more effective sourcing and use of products and services.
As AI technologies evolve rapidly, governments must strike an appropriate balance between protecting privacy and intellectual property and ensuring that innovation is not unintentionally constrained.

Over‑regulation risks limiting the industry’s ability to adopt new technologies that can help address skills shortages and improve productivity.
 
Values Statement for the residential building industry
The NPC unanimously agreed to adopt a Values Statement for its members and the broader sphere of influence within the residential building industry.
The Values Statement articulates a set of core beliefs and principles intended to guide behaviour and decision‑making, and to inform how the industry operates and engages with stakeholders.

The congress agreed that a clearly defined values framework would be beneficial to industry participants, the community and governments.
The statement is underpinned by eight core principles designed to guide decision‑making, reinforce lawful and acceptable conduct, build trust, strengthen professionalism, promote ethical behaviour, and improve safety and building performance outcomes.
 
Circular economy

The NPC noted the emergence of the circular economy – an environmental concept aimed at maintaining the value of materials for as long as possible across all phases of their life cycle.
The Federal Government’s net zero plan foreshadows increased adoption of circular economy principles, including targets to reduce material footprints, lift materials productivity and increase resource recovery.

The congress affirmed that the industry does not support circular economy principles being imposed as mandatory requirements in the design, manufacture or demolition of buildings. “Any targets must not compromise the primary objectives of the National Construction Code and relevant Australian Standards relating to life safety, nor undermine housing supply or affordability,” a HIA spokesperson said.
“Policies affecting building products must preserve consumer and industry choice in materials and building solutions.

“Frameworks and regulations must recognise competing performance objectives, the high operational energy efficiency of new homes, and regional and geographical considerations that require flexibility in product selection.”

www.hia.com.au

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NEW HOME sales increased by 17% in March, in spite of the 0.25% rise in the cash rate and increasing fuel prices according to Housing Industry Association (HIA) chief economist Tim Reardon.

The HIA New Home Sales report is a monthly survey of the largest volume home builders in the five largest states and is a leading indicator of future detached home construction.

“Sales of new homes have been increasing since early 2025 and the disruptions of the past two months have not stopped this momentum, with sales for the March quarter 31.9% higher than at the same time last year,” Mr Reardon said.

“This is a strong result given the impact of two rate increases and heightened global uncertainty.

“This likely reflects the strength of the recovery that was underway prior to the increase in rates and the strong growth in established home prices over the past year," he said.  

“The growth in sales could partly reflect a growing involvement from first home buyers who are no longer required to take out mortgage insurance, although this data isn’t available through this data set. A jump in sales in New South Wales and Victoria is a welcome sign given their low volume of detached starts.

“More broadly, demand for housing remains strong, supported by strong population growth and low unemployment. These structural drivers continue to underpin activity, even as borrowing costs rise.

“However, the capacity to respond to this demand remains constrained. The rise in the cost of skilled labour and materials is expected to persist through 2026, while access to shovel ready land remains the key limit the number of homes that can be delivered,” Mr Reardon said.

“Input costs are also emerging as a renewed risk. More significant is the risk that higher energy costs feed into the production of materials such as steel, bricks and concrete, which would place further upward pressure on construction costs later in 2026.”

By state, Queensland recorded the largest monthly increase in March, with a 34.3% rise.

This was followed by South Australia (+22.5%), Victoria (+19.1%) and New South Wales (+11.8%) with Western Australia the only state to see a decline in new home sales contracts (-0.3%).

www.hia.com.au

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AUSTRALIA’s home building industry is expected to strengthen through 2026, supported by gradually improving building approval levels and a recovery in demand, but the pace of growth will depend on how quickly interest rates can fall, according to the Housing Industry Association (HIA).

HIA senior economist Tom Devitt said new data on building approvals and inflation, released today, provides an important signal for the housing market as it enters 2026.

“Building approvals are the clearest leading indicator of future home building, and they have been gradually rising over the past year as the cash rate fell,” Mr Devitt said. 

“Building approvals data shows activity has been strengthening over the last couple of years, including a 10.1% increase in house approvals in the last three months compared to the same quarter two years earlier, and a 36.4% increase in multi-unit approvals over the same period. 

“We expect approvals to continue trending upward, which should translate into higher levels of home building activity through 2026, particularly once the impact of earlier rate cuts flows through to construction starts.

“It is anticipated that a recovery will continue in both detached housing and multi-unit construction from 2026 onward, following several years of subdued activity, especially in the apartment sector,” Mr Devitt said.

“After nearly a decade of underbuilding, the foundations are finally being laid for a broader housing recovery in 2026.

“Strong population growth, rising established home prices and an improving approvals pipeline are all pointing toward higher levels of home building over the next few years.

“While the price of land and taxes on housing are the key determinants of the number of homes to be built this year, inflation also remains a risk to a faster recovery in home building,” he said.

“The trimmed mean consumer price index for November came in at an annual rate of 3.2%, indicating that further rate cuts will be delayed.

“A few recent surprises to electricity and rental prices lifted the annual rate of inflation above the RBA’s 2-3% target.

“Property rates have also been accelerating, with each of the last five annual increases larger than the last, increasing by a further 6.2% in 2025.

“There have also been recent pressures in other items like water and sewerage utilities and government excise taxes,” Mr Devitt said.

“Price pressures have eased from their peak and many of the recent upward surprises are driven by temporary factors, like the timing of electricity rebates or domestic holiday activities.

“Nonetheless, CPI inflation is likely to remain elevated in the near term and the RBA is on the lookout for any signs of underlying inflation being reignited.

“The rate cuts delivered in 2025 provided an important tailwind for housing demand and approvals. But without further easing in borrowing costs, the recovery in home building will be more gradual than Australia needs, given the scale of the housing shortfall.”

According to HIA estimates, Australia remains short of its housing needs by close to two million homes, with population growth continuing to outpace new supply.

“This is the central challenge facing the housing market in 2026,” Mr Devitt said.

“A constrained supply of new homes is adding to upward pressure on rents, prices and inflation itself, which in turn feeds back into higher interest rates.”

“It is particularly counterproductive that the shortage of housing supply is putting pressure on inflation and interest rates, further impeding new home building.”

HIA’s outlook shows detached home building strengthening across most states in 2026, led by Queensland, South Australia and Western Australia, with New South Wales and Victoria beginning to recover after lagging earlier in the cycle.

The multi-unit sector is also expected to turn a corner from 2026, as higher established unit prices improve project feasibility and a large pipeline of approved but not commenced projects begins to move. 

“The next housing upswing is taking shape, but it will not reach its full potential unless policy settings support it,” Mr Devitt said.

“Lowering the cost of delivering new homes through planning reform, improved land supply and lower government charges will be critical if Australia is to lift housing supply without reigniting inflation,” he said.

In seasonally adjusted terms, the volume of new home approvals in the three months to November compared with the same quarter two years earlier increased the most in Western Australia, up by 71.3%.

This was followed by Queensland (+33.6%), South Australia (+29.2%), New South Wales (+24.6%), Victoria (+3.7%) and Tasmania (+0.5%). In original terms, the Northern Territory increased by 68.1% while the Australian Capital Territory declined by 47.5%.

www.hia.com.au

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