Australia needs more homes. But Australia also needs financially sustainable businesses capable of finishing them.
That distinction matters because Australia’s housing challenge is sometimes reduced to a single question: How do we approve more homes?
Mortgage House believes the better question is: How do we reliably convert more Australian housing demand into completed, compliant and habitable homes while protecting the families, builders, tradespeople and capital required to produce them?
The Australian Bureau of Statistics provides a compelling starting point.
Australia’s National Housing Accord contains an aspirational target of 1.2 million new well-located homes over five years from 1 July 2024. Mathematically, that represents an average of approximately 240,000 completed homes each year, or around 60,000 per quarter, if delivery were evenly distributed.
The latest ABS Building Activity release available at the time of publication recorded 43,816 dwellings completed in the March quarter of 2026, seasonally adjusted. That was approximately 16,184 dwellings below a simple 60,000-per-quarter trajectory. In percentage terms, the quarter was approximately 27% below that evenly distributed benchmark.
That calculation is not an ABS or Treasury forecast and should not be treated as one. It is simply a useful way to illustrate the scale of Australia’s national housing-delivery challenge.
Australia’s housing challenge is an execution challenge
The same ABS release recorded 48,012 dwelling commencements during the March 2026 quarter, down 11.2% from the previous quarter. Private-sector house commencements fell 3.5% to 27,658. Private-sector other residential commencements fell 20.7% to 19,116.
At the end of that quarter there were 243,864 dwellings under construction across Australia, including 90,972 new houses. Those 243,864 dwellings help explain why builder financial sustainability is not merely a corporate issue.
Each unfinished home can sit at the centre of a network involving:
- a homeowner or purchaser;
- a builder;
- employees;
- tradespeople;
- suppliers;
- construction finance;
- insurance;
- progress payments;
- building materials;
- certification;
- land;
- and months or years of household planning.
When a significant builder fails, the economic damage can travel throughout that network.
Approvals are necessary—but they are not completed homes
The latest ABS Building Approvals release recorded 17,687 dwellings approved in July 2026, seasonally adjusted. That represented a 3.6% monthly decline. Private-sector house approvals fell 4.2% to 10,199, while private-sector dwellings excluding houses fell 0.4% to 7,119. The value of total residential building approved fell 4.9% to approximately $11.26 billion.
Approvals matter enormously. But an approval is not a completed home.
Australia’s housing delivery chain is better understood as: land and infrastructure → planning → approval → finance → commencement → construction → completion → occupation.
Failure or delay at any stage reduces the ultimate supply of usable housing. That means housing policy needs to measure conversion between stages—not simply activity at the beginning of the pipeline.
Australia’s population is still growing
Demand also matters. The ABS estimates that Australia’s population reached 27,801,023 people at 31 December 2025. The population increased by 412,500 people over the preceding year, equivalent to growth of 1.5%. That comprised approximately 301,000 from net overseas migration and 111,500 from natural increase.
Population growth should not be simplistically characterised as the cause of Australia’s housing difficulties. Australia’s population creates economic activity, skills, businesses, investment and communities. But housing demand and housing production cannot sensibly be analysed independently. A country adding more than 400,000 people in a year requires an efficient housing-production system.
Australia is already building at enormous scale
This is not a story about an inactive construction industry. ABS preliminary estimates show $82.5 billion of construction work was completed during the June 2026 quarter, in seasonally adjusted chain-volume terms. Building work accounted for approximately $45.8 billion, including around $27.9 billion of residential construction work. Building work was 10.0% higher than a year earlier.
Australia therefore already has enormous human, financial and industrial resources committed to construction. The challenge is improving the reliability with which those resources become completed housing.
Construction costs remain a real commercial pressure
The ABS Producer Price Index shows why builder sustainability cannot be ignored. Input prices to house construction increased 3.8% over the year to the June quarter of 2026. During the June quarter alone they increased 2.1%.
ABS reported annual input-price movements of: Sydney 3.5%; Melbourne 3.5%; Brisbane 4.4%; Adelaide 4.4%; Perth 3.9%; and Hobart 3.4%.
The ABS also reported a 2.0% quarterly increase in house-construction output prices, the largest quarterly increase since September 2022. Factors cited by the ABS included fuel costs, transport, PVC, aluminium and competition for resources including labour, concrete and copper.
For a homeowner, those may look like percentages. For a building company operating on relatively thin project margins, they can represent material changes to the economics of contracts signed months earlier.
Why are builders vulnerable?
There is rarely a single explanation. Builder failure can arise from combinations of: poor management; inadequate capital; excessive growth; weak project costing; fixed-price contracts; construction delays; labour shortages; material-price changes; poor cash-flow management; insufficient contingency; subcontractor failure; financing costs; regulatory delays; and unexpected external shocks.
Some failures are preventable. Some businesses should not survive. Good housing policy should therefore avoid the dangerous assumption that every builder failure deserves government assistance. It should instead ask: Can we distinguish a fundamentally viable building business experiencing temporary or extraordinary stress from a structurally unsustainable business that should exit the market? That distinction is central to responsible reform.
What happens if your builder becomes insolvent?
For a homeowner, builder insolvency can be frightening. The consequences depend upon your state, contract, construction stage, insurer, payments made and specific circumstances. Australian homeowner-protection arrangements are principally state and territory based, meaning protection is not identical around the country.
A homeowner facing a failed builder should obtain the most recent documentation available and preserve it carefully. Useful documents commonly include:
- signed building contract;
- variations;
- plans and specifications;
- progress-payment records;
- bank statements;
- invoices;
- building-insurance or warranty certificates;
- inspection reports;
- builder correspondence;
- photographs;
- certification;
- loan documentation;
- and a current record of the work actually completed.
The more recent and accurate the supporting documentation, the easier it is for insurers, lenders, replacement builders and advisers to establish the true position. Do not rely solely on recollection. Do not destroy correspondence. Do not authorise unexplained further payments simply because a distressed contractor requests them. Seek appropriate professional advice for your circumstances.
Homeowner warranty is essential—but prevention should come first
Australia already recognises that homeowners need protection when builders fail. Different jurisdictions use different mechanisms and coverage. Those safeguards are important and should remain. However, Mortgage House believes Australia should ask a more ambitious question: Why should our principal protection mechanisms operate only after serious financial failure has already occurred?
A modern housing system should operate at two levels. First, reduce preventable builder failure. Second, protect homeowners where failure nevertheless occurs. The two objectives reinforce one another.
Mortgage House proposes seven national reforms
1. National minimum homeowner-protection principles
State and territory schemes need not become identical. However, Australians should be able to rely upon an understandable national minimum standard covering important matters such as: non-completion; builder insolvency; major defects; lost deposits; consumer disclosure; claims processes; and minimum protection. States could continue to innovate above that floor.
2. Earlier financial-health monitoring
Australia should explore proportionate financial-resilience monitoring for larger builders. Indicators might include: working capital; liquidity; taxation liabilities; superannuation liabilities; aged creditors; project margins; cost-to-complete; subcontractor payment performance; open-job value; contract concentration; warranty exposure; and forward workload.
This should not become bureaucracy for its own sake. The purpose is early warning. A financial problem identified six months before insolvency may have many possible solutions. A business identified after it has run out of cash may have very few.
3. Protect project cash
Technology creates an opportunity to establish much greater transparency over the money flowing through residential construction. Progress payments can increasingly be connected with: verified construction milestones; approved variations; subcontractor liabilities; materials; project expenditure; and cost-to-complete.
Australia should consider whether appropriate project-account, trust-account or controlled-payment arrangements could reduce the risk that money intended to complete one group of homes becomes disconnected from those obligations.
4. Create a catastrophic construction resilience mechanism
Mortgage House believes the Commonwealth and states should investigate an independently designed construction resilience facility. This must not become a bailout for poor management. Industry should bear the overwhelming majority of ordinary business risk.
However, Australia should determine whether genuinely extraordinary economy-wide shocks are better addressed through a structured risk-pooling, insurance or reinsurance mechanism than through repeated disorderly insolvencies. Eligibility would need rigorous controls around: capital; governance; tax compliance; financial reporting; subcontractor payments; project economics; and director conduct. Reckless underquoting should not qualify. Weak governance should not qualify. Extraction of inappropriate capital should not qualify. The facility would exist for exceptional systemic events—not ordinary commercial mistakes.
5. Improve construction contracts
Moving a risk into a contract does not eliminate the risk. Australia should develop best-practice residential construction principles capable of distinguishing: normal commercial price movement; consumer-requested changes; builder-controlled delays; owner-controlled delays; and genuinely extraordinary systemic events.
Homeowners deserve meaningful price certainty. Builders need contracts that remain economically deliverable. Those outcomes should not be mutually exclusive.
6. Make construction productivity a national housing priority
Australia cannot sustainably improve housing affordability merely by increasing selling prices until the construction sector becomes viable. We need to lower the real resources required to produce each completed home. That means accelerating: prefabrication; modern methods of construction; digital design; BIM; standardised components; AI-assisted scheduling; automated procurement; better data interoperability; faster approvals; industrialised construction; skills development; and more efficient logistics.
The objective is a virtuous economic cycle: higher productivity → lower unit cost → healthier builder economics → increased capacity → more completed homes → stronger housing supply.
7. Restructure viable businesses before value is destroyed
Insolvency should not be the moment Australia first discovers that a major builder is distressed. Where a fundamentally viable business encounters temporary difficulty, early intervention may create opportunities for: capital restructuring; lender coordination; safe-harbour arrangements; project triage; contract transfer; replacement-builder arrangements; controlled completion; or formal restructuring.
Where a business is genuinely insolvent and non-viable, appropriate insolvency processes should proceed. The aim is not to save every company. It is to avoid destroying viable housing capacity unnecessarily.
A national housing target needs a national housing delivery dashboard
If Australia is serious about 1.2 million homes, performance should be visible. Mortgage House proposes a national public dashboard reporting: approvals; commencements; dwellings under construction; completions; average construction time; project abandonment; construction costs; builder insolvencies; affected dwellings; home-warranty claims; workforce capacity; and conversion rates through the housing-development pipeline. The public should be able to see whether Australia is getting closer to its target—and where the constraints are occurring.
The numbers Australians should know
- 1.2 million homes: The National Housing Accord’s aspirational five-year target.
- 240,000 homes a year: The simple annual average required to reach 1.2 million over five years.
- 60,000 homes per quarter: The equivalent simple quarterly average.
- 43,816 completed dwellings: ABS seasonally adjusted March quarter 2026 result.
- 48,012 dwelling commencements: ABS March quarter 2026 result, down 11.2%.
- 243,864 dwellings under construction: ABS March quarter 2026 pipeline.
- 17,687 dwelling approvals: ABS July 2026 seasonally adjusted result.
- $82.5 billion: Australian construction work completed in the June quarter of 2026, seasonally adjusted chain-volume terms.
- 3.8%: Annual increase in house-construction input prices to June 2026.
- 27.8 million Australians: Estimated population at 31 December 2025.
- 412,500 additional people: Annual population increase to December 2025.
These figures should not be combined to suggest that any single factor causes Australia’s housing shortage. Housing is a complex system. Planning, land, infrastructure, workforce, finance, productivity, construction costs, population, interest rates and consumer demand all matter. That is precisely why Australia’s response needs to be systemic.
What this means if you are building a home
If you are preparing to build, focus on more than the appearance of the finished property. Understand: who you are contracting with; what insurance or warranty protection applies; how progress payments operate; what happens if construction is delayed; how variations work; what documentation you will receive; and how your construction finance interacts with project milestones.
Keep your information current. Retain copies of all important records. Ask questions when something does not make sense. A good construction journey should be understandable. We aim to make the process as easy as possible.
How Mortgage House can assist borrowers
Mortgage House can assist eligible borrowers exploring construction finance, home ownership, refinancing, investment and other mortgage requirements. Our role as a lender is different from that of a builder, building certifier, insurer or legal adviser.
For a construction home loan, lending typically involves staged progress payments as construction moves through agreed phases, subject to the applicable loan, documentation, valuation, construction and credit requirements. Borrowers can use Mortgage House’s calculators and lending information to understand potential borrowing requirements before deciding whether to proceed. Every application remains subject to verification, applicable credit criteria and responsible lending requirements.
Australian lenders have strong incentives to compete for customers
Australian borrowers today operate in a highly competitive lending market. Banks, non-bank lenders and specialist lenders compete across: interest rates; product features; service; turnaround; digital capability; loan structure; borrower type; property purpose; and customer experience.
That competition can benefit consumers—but the lowest headline rate will not necessarily represent the right solution for every borrower. Borrowers should consider the overall structure, including: comparison rate; fees; repayment flexibility; offset capability; redraw; loan purpose; serviceability; loan-to-value ratio; product conditions; and quality of ongoing service. Mortgage House’s objective is to help customers understand those choices with as little unnecessary friction as possible.
“Completed homes—not announcements—must be the measure”
Mortgage House CEO Ken Sayer said Australia’s housing debate needed to become more focused on execution. “Australia’s housing target ultimately has to become a completed home with a family able to turn the key.”
“The ABS recorded 43,816 dwellings completed in the March 2026 quarter while 243,864 dwellings remained under construction. Those numbers demonstrate the enormous amount of Australian household aspiration, business capacity and capital sitting inside the housing-production system.”
“Approvals matter. Planning reform matters. Infrastructure matters. But none of them can finish a home if the business responsible for building it cannot remain viable through the construction period.”
Mr Sayer said stronger homeowner protection and stronger builder governance should reinforce one another. “A financially disciplined builder should be encouraged to remain financially disciplined. A poorly governed business should not be rescued from normal commercial consequences. But where responsible businesses face genuinely extraordinary circumstances, Australia should at least examine whether better risk engineering, earlier warning and smarter restructuring can preserve housing capacity without creating moral hazard.”
He said the objective should be straightforward. “Protect the homeowner. Protect project money. Strengthen responsible builders. Increase productivity. Detect distress earlier. Complete more homes.”
Mortgage House calls for Commonwealth leadership
Mortgage House believes the Commonwealth should lead a National Homebuilding Resilience Taskforce through National Cabinet. It should include: Commonwealth agencies; states and territories; homeowners and consumer representatives; builders; tradespeople; banks; non-bank lenders; construction financiers; home-warranty providers; insurers and reinsurers; quantity surveyors; insolvency practitioners; construction economists; technology providers; and housing specialists.
Its purpose should not be to produce another housing report. Its purpose should be to design measurable implementation. Australia’s housing problem is too important for fragmented responsibility.
The final measure is a home somebody can live in
A development application is not a home. A building approval is not a home. A financing commitment is not a home. A commencement is not a home. An unfinished dwelling is not a home. Australia ultimately needs completed, compliant and habitable homes. That is the point at which planning, finance, labour, capital, construction and public policy have actually delivered.
Australia therefore cannot solve its housing shortage simply by demanding more output from a construction sector already experiencing substantial commercial pressure. It must increase the productive capacity and financial resilience of the system itself. Australia cannot sustainably build its way out of the housing crisis on fragile balance sheets.
We can protect homeowners more effectively. We can identify business distress earlier. We can engineer stronger construction businesses. We can make project cash more transparent. We can lift productivity. We can improve construction finance. And we can judge housing policy by the measure that matters most: keys in doors.
