More than half spend over five hours weekly on red tape
Australia’s plan to deliver 1.2 million homes by 2029 faces mounting pressure, with 68% of small builders considering scaling back or closing and 73% not planning to hire more staff in 2025/26, according to the HIA 2026 Small Business Conditions Survey.
The federal government has committed to delivering 1.2 million homes over five years to 2029. In the first full year to June 30, 2025, Australia was around 60,000 homes behind schedule, based on HIA data.
Small businesses construct around two-thirds of the nation’s new homes each year. The HIA Housing 100 report shows the largest 100 builders delivered 64,407 homes in 2024/25, representing 36% of all dwelling starts.
“Small building businesses in regional Australia are warning that housing shortages will deepen unless governments address planning delays, workforce shortages and rising compliance costs,” HIA chief executive industry and policy Simon Croft said.
The survey, conducted nationally among HIA small business members in November and December 2025, found 73% of respondents do not expect to employ more staff in 2025/26 than in 2024/25. Only 27% plan to increase employment. In addition, 67% reported challenges recruiting or retaining skilled workers.
“Regional builders don’t have large workforces or spare cashflow to absorb delays,” Croft said.
Planning timeframes remain a constraint. Overall, 88% of respondents reported that planning approvals take longer than eight weeks, with 33% waiting more than six months before construction can begin.
“In regional towns, a single delayed approval can stall a business for months, that hits cashflow, local jobs and the number of homes that can be delivered in the community," Croft said.
Data in the survey show 72% of respondents identified rising insurance costs among current pressures facing their business. Time and cost of planning approvals were cited by 63%, availability of skilled labour by 62%, cost of skilled labour by 61%, and compliance with changes to the National Construction Code by 54%. Managing cashflow was nominated by 38%.
State results show variation. In New South Wales, 70% cited the time and cost of planning approvals and nearly two-thirds reported difficulty finding skilled labour. In Victoria, more than 85% identified rising insurance costs. In Queensland, 78% reported difficulty finding skilled workers. In Western Australia, two-thirds said the cost of skilled labour made it harder to take on new work. In South Australia, more than three-quarters reported difficulty sourcing skilled labour.
Workload pressures extend to administration. Fifty-six per cent of respondents said they had taken on additional staff or required existing staff to dedicate more hours to administrative or regulatory tasks over the past 12 months. Just over half, 53%, spend five hours or more each week complying with red tape and regulatory burdens, including 32% who spend more than 10 hours. Compliance costs exceed $10,000 per year for 45% of respondents, while 35% spend more than $5,000 and 20% less than $5,000.
Profit expectations remain restrained. Nationally, 59% of respondents do not anticipate making a greater profit in 2025/26 than in 2024/25, while 41% expect an improvement.
“The survey highlights the unique pressures facing regional small businesses, which are critical to delivering new homes and supporting local jobs,” Croft said. “The findings reinforce the need for targeted reforms to support regional small businesses and lift housing supply.”
