Evidence before this Committee shows that housing construction productivity has declined materially over the past ten years. These outcomes are not a reflection of lower skills or effort in the industry, but of the systems and policy settings within which the industry is required to operate.

HIA’s submission makes clear that the regulatory burden is the single most significant drag on housing productivity. Residential construction is subject to multiple and overlapping layers of regulation at local, state and federal levels - including planning and zoning, environmental approvals, and frequent and complex changes to the National Construction Code. Each layer adds cost, delay, uncertainty and risk - diverting resources away from actual home building and constraining the industry’s ability to innovate and scale.

Inconsistent planning frameworks between jurisdictions, lengthy and unpredictable approval timeframes, and regulatory churn all contribute to slower delivery and reduced supply. 

The consequences extend beyond the housing sector. High housing costs are now a major contributor to broader cost of living pressures, reduced labour mobility, declining workforce participation, and weaker economic performance. When housing supply cannot respond flexibly to demand, productivity across the entire economy suffers.

In that context, HIA strongly supports productivity enhancing reforms that focus on:

• simplifying and harmonising regulation across jurisdictions;
• delivering faster, more predictable planning and approval pathways;
• ensuring a stable, evidence based and buildable National Construction Code;
• supporting innovation, digitisation and modern construction methods; and,
• strengthening workforce skills and supply.

Importantly, improving productivity is not about lowering standards or compromising safety. It is about designing smarter regulatory systems that achieve public policy objectives while enabling the industry to deliver homes efficiently, and at scale.

HIA’s submission also emphasises the importance of establishing a multi decade national settlement strategy as a core element of productivity reform.

Australia’s population growth outlook is strong and sustained, yet our settlement patterns remain highly concentrated in a small number of major metropolitan areas. This concentration intensifies pressure on housing markets, infrastructure, and labour supply - while amplifying the very productivity challenges this inquiry is examining.

A long term national settlement strategy must look beyond electoral cycles and align population policy, infrastructure investment, land supply, housing delivery and employment growth over several decades. 

From a housing productivity perspective this means:

• identifying future growth corridors and regional centres early;
• sequencing infrastructure and services ahead of development;
• ensuring land supply keeps pace with population growth; and,
• aligning Commonwealth, state and local government roles into a single, coordinated system.

Such a strategy is about creating genuine, productive choices for where Australians live and work, easing pressure in capital cities and enabling housing markets to function more efficiently across the country.

Without a clear, long term settlement framework, productivity reforms in housing will continue to be undermined by reactive policy settings, infrastructure shortfalls and recurring supply constraints. 

Finally, HIA believes it is critical that this inquiry goes beyond just producing another report or set of recommendations on red tape and regulatory impediments.

The challenges confronting housing productivity are well known. They have been identified repeatedly through numerous reviews, inquiries and reports over many years. What has been lacking is not diagnosis, but delivery.

For this inquiry to make a lasting contribution to Australia’s productivity, it must help drive real, meaningful and sustained reform - reform that is implemented, embedded and maintained over time, rather than revisited inquiry after inquiry.

That level of reform must come from the top. It requires strong national leadership and a clear commitment to long term policy stability. Crucially, it must be supported on a bipartisan basis so that reform settings will endure beyond political cycles.

Housing is a long term investment. Productivity gains cannot be achieved amid constant regulatory churn and policy uncertainty. Bipartisan commitment is therefore not a political aspiration - it is an economic necessity.

HIA urges this Committee to frame its work with that objective firmly in mind - not simply to add to the body of analysis, but to help catalyse reform that supports Australia’s long term prosperity.

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