HIA Small Business Conditions Survey 2026

Yet small building businesses across the nation report that running and operating a profitable business has never been harder or more complex. Regulation disproportionately burdens small and family businesses, as it tends to be designed with the big corporates in mind and then applied as one-size-fits-all. The HIA 2026 Small Business Conditions Survey shows that while small builders remain resilient, they are facing significant challenges heading into the new year.

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Support needed to build 1.2 million homes

Demand for new housing is strong, but rising costs, skills shortages, complex regulations, and planning delays are making it increasingly difficult for builders to keep up. The Federal Government has committed to delivering 1.2 million homes over five years to 2029. However, in the first full year - the twelve months to 30 June 2025 - Australia was already sitting around 60,000 homes behind schedule.

Despite the community’s appetite for more housing and the industry’s potential capacity to build more, the survey reveals high levels of concern among small and medium builders across the country. Increasing taxes and regulation, persistent skills shortages, planning delays, policy uncertainty, and escalating business costs continue to weigh heavily on the sector.

These pressures force builders and tradespeople to spend more time on paperwork and less time on-site - ultimately reducing industry productivity and making housing less affordable and less accessible for Australians.

What small business says

Key challenges

1. Business conditions

Population growth will continue to fuel strong demand for new housing, but day‑to‑day operating pressures are weighing heavily on small builders. Labour, insurance, finance, and compliance costs remain elevated. At the same time, planning delays and uncertainty around approvals are disrupting schedules, slowing revenue flow, and increasing holding costs - leaving many builders reluctant to expand.

2. Employment intentions

Hiring intentions remain cautious. Builders are only bringing on new staff when workloads and project approvals are stable and predictable. Ongoing uncertainty around input costs, workforce availability, and regulatory changes is reinforcing a conservative approach to growth.

3. Skills and workforce capacity

Skills shortages continue to be a major constraint. Around two‑thirds of builders report difficulties recruiting or retaining skilled workers, particularly experienced tradespeople and site supervisors. While apprenticeships remain essential to building future capacity, rising costs and increased supervision requirements are limiting the ability of many businesses to take on new apprentices.

4. Regulation, planning, and productivity

Complex regulatory requirements and slow planning approvals are undermining industry productivity. Builders are spending more time on paperwork and compliance activities, leaving less time available for on‑site work. These inefficiencies add directly to project costs and reduce overall industry output.

5. Impact on housing supply

Australia’s housing supply challenge is increasingly tied to capacity constraints. High operating costs, workforce shortages, and productivity losses mean fewer homes are being completed. Without reforms that increase certainty, streamline approvals, and support efficient project delivery, national housing targets will be difficult to achieve.

6. Outlook for 2026

Builders remain resilient but cautious. Confidence would strengthen with faster planning decisions, reduced administrative burdens, and better‑supported training pathways. With the right policy settings, small builders can expand their workforce, improve productivity, and play a leading role in meeting Australia’s housing needs. 

Critical pressures