Only 23% of Australian new home builds finish on time

Only 23% of new home builds Australians followed in the past year were completed on time, according to the first iCIRT Construction Index, which combines consumer research with commercial credit data.

The report points to pressure across residential construction from planning delays, labour shortages, and weakening conditions among smaller builders and trade businesses. It also suggests the industry's ability to add capacity is being reduced by business exits and tighter access to finance.

Planning approvals and site preparation were the biggest bottlenecks in the housing pipeline. About 22% of respondents cited council delays, excavation, and related early-stage work as the main source of disruption, compared with 11% for structural framing and 12% for internal fit-outs.

Labour availability also featured heavily in the survey. Seven in 10 Australians said worker shortages somewhat or critically delay new housing completions, while 31% said labour constraints are critically affecting housing supply.

More than a third, or 35%, said a lack of reliable, qualified contractors was a primary barrier to buying, building, or renovating. Major renovations performed slightly better than new home projects, with 29% reported as finishing on time.

Finance pressure

Commercial credit data showed a widening gap between larger construction groups and smaller operators. Large construction businesses recorded 3% year-on-year growth in credit demand in the second quarter, while demand among small and medium-sized construction firms fell 3.8%.

The decline was linked to a 6.5% year-on-year drop in asset finance and growth capital among smaller trade businesses, suggesting some firms are postponing equipment and machinery purchases. The pullback was strongest in Victoria, where asset finance fell 9%, and in New South Wales, where it fell 6.7%.

At the same time, the number of new small trade entrants dropped 19% from a year earlier. Small trade business exits rose 58%, while exits across construction companies as a whole increased 114%.

The report also recorded a 43% rise in new Australian Taxation Office tax default disclosures across construction, alongside a 9% increase in insolvencies among smaller firms. Early trade payment arrears rose 4.7% and increased sharply late in the second quarter, reflecting cash flow stress among operators.

Brad Walters, General Manager, Commercial, Equifax Australia, said the findings showed strain at both the project and business levels. "Construction underpins a significant share of Australia's broader economic activity and workforce, but our research shows the sector is facing constraints on the ground.

"When consumers managing or following active projects in the past year report that just 23% of new builds are finishing on schedule, the effects extend beyond individual site delays. They can ripple through housing affordability, productivity, and national supply targets. The index shows that supporting Australia's broader economic goals requires close attention to the capacity bottlenecks and financial friction facing local builders and trades."

Demand eases

The figures also suggest demand may be weakening as households reassess budgets and risk. The share of Australians intending to build a new home within the next five years fell to 5% from 10% a year earlier.

Broader property activity intentions also declined. The share planning to buy, build, or renovate in the next five years fell to 38% from 51%.

Confidence in newly built multi-unit housing was low. Only 10% of Australians said they were very confident in the structural quality and long-term durability of new apartments or build-to-rent developments, down from 15% a year earlier.

Household resilience to project overruns appeared limited. The report said 35% of Australians would be unable to absorb a cost overrun of more than 5%, adding another constraint to activity in a market already dealing with delays and uncertainty.

Walters said those pressures were feeding back into buyer behaviour. "In an environment where homebuilding intentions have nearly halved and households have little capacity for unexpected budget inflation, trust and transparency become the primary differentiators. When Australians report that only 7% of builds finish on time, property buyers cannot afford to enter contracts blindly. Independent due diligence, such as an iCIRT rating, can give buyers visibility into a builder's resilience and track record before committing."