Why building a house takes longer than it used to

If you've built a home lately, or waited on someone who has, you already know the feeling. The job takes longer, costs more, and the builder looks more stressed at the end of it. The numbers back that up.

The Productivity Commission's 2025 research paper, Housing construction productivity: Can we fix it?, found that the number of dwellings completed per hour worked in housing construction fell 53 per cent over the past 30 years. Even after adjusting for the fact that homes are now bigger and better finished, labour productivity is down 12 per cent. Over the same period, productivity across the wider economy rose 49 per cent. For detached houses specifically, the Commission found labour productivity has fallen 25 per cent since 2001-02.

Build times tell the same story. According to ABS data cited by the Commission, the average detached house took about 10.4 months to complete in 2023-24, up from about 6.4 months a decade earlier. Things have eased a little since, with the average dropping to around 9.2 months in 2024-25, but Master Builders Australia still puts a new detached house at roughly a third slower to build than ten years ago.

So what's going on? From where I sit, running a building company in Western Sydney, it isn't one thing. It's a stack of smaller problems that compound each other.

Approvals and regulation

Before a slab is poured, a project has to get through planning and certification. The Commission points to complex and slow approvals and poor coordination between local, state and federal rules as a major drag. It also notes the National Construction Code has never been comprehensively reviewed. Every extra month waiting on paperwork is a month of holding costs for the client and a gap in the program for the builder.

Trades and the infrastructure pull

Housing relies on a long chain of trades: excavators, concreters, bricklayers, carpenters, plumbers, electricians, tilers. When one link is short, the whole chain waits. Over the past few years, large public infrastructure projects have competed for many of the same workers and materials, often offering steadier work and better rates than residential jobs can match. Industry commentators have noted that as some of those big projects wind down, pressure on labour has started to ease, which is one reason build times have come off their peak.

Licensing rules that differ between states also make it harder for skilled workers to move to where the work is. The Commission lists workforce mobility and national consistency in occupational licensing as one of its four priorities.

Materials and logistics

The pandemic years exposed how fragile supply chains were. Shortages of timber, steel and other inputs, along with fast-rising prices, pushed jobs out and blew up fixed-price contracts. Supply has improved, but builders learned the hard way that one late delivery can stall a site for weeks.

Small firms, thin margins

Most residential builders are small businesses. The Commission notes that the small scale of most construction firms limits investment in new methods and technology. Small firms also carry the risk when a program stretches. A job that runs four months over ties up more working capital, more supervision time and more insurance, often under a contract price set a year earlier. Stretch that across several jobs and a sound business can find itself in real trouble. Slower pipelines mean everyone in the chain needs more capital to do the same amount of work.

Innovation that struggles to get going

Prefabrication and modular construction get plenty of attention, but uptake in Australia remains limited. Part of that is regulation, part is that a fragmented industry of small firms struggles to fund the upfront investment. The Commission recommends removing impediments to innovation and encouraging methods like modular building.

What would actually help

None of this needs a miracle. A few practical steps would make a real difference:

Faster, better resourced approvals. Councils need the staff and the clear rules to make timely decisions. Standard designs for common housing types, such as duplexes and granny flats, could be fast-tracked.

A proper review of the building code. The Commission has called for an independent review of building regulation, with a focus on the National Construction Code. Rules should be judged on what they cost as well as what they deliver.

National licensing. A licensed tradesperson in one state should be able to work in another without starting from scratch.

Better pipeline planning. Governments can stagger major infrastructure projects so they don't all compete for the same workforce at once.

Support for apprentices and new methods. Keeping people in the trades through the tough early years, and backing builders willing to try prefabricated components, would lift output over time.

Why it matters

Australia's governments have committed to building 1.2 million homes in five years. That target won't be met by asking the same number of workers to work harder. It will only be met if each hour on site produces more housing than it does now.

For builders, faster and more predictable programs mean lower risk and healthier businesses. For buyers, they mean lower costs and getting the keys sooner. Productivity sounds like an economist's word, but on a building site it just means fewer delays, and everyone wants that.