Industry groups are renewing calls for regulatory reform, arguing that excessive red tape is a major contributor to housing unaffordability.

The housing construction sector says cutting regulatory costs is essential if supply is to increase meaningfully over the coming years.

Master Builders Australia estimates that red tape adds around $12 billion in costs across the construction sector. It argues that reducing these costs by 25% would significantly improve productivity and help accelerate housing delivery.

In its latest budget submission, the organisation says reform is critical if the Federal Government wants to meet its housing targets under the National Housing Accord. Without productivity gains, the industry believes current supply shortfalls will persist.

Master Builders chief executive Danita Wawn says productivity must return to levels seen a decade ago if targets are to be met. She argues that regulatory complexity has steadily eroded efficiency, increasing build times and costs without necessarily improving outcomes.

The Australian Productivity Commission has quantified the impact. In 2025, it estimated that regulation added up to $320,000 to the cost of a new house and $175,000 to the cost of a new unit. For multi-unit developments, paperwork alone accounts for around 33% to 36% of total regulatory costs.

These costs are ultimately borne by buyers and renters. Higher construction expenses flow through to sale prices and rents, reducing affordability and limiting options for households.

The industry is calling for streamlined approvals, better coordination between government agencies and clearer planning frameworks. While safety and quality standards remain essential, builders argue there is significant scope to reduce duplication and inefficiency.

With housing affordability now a national priority, pressure is mounting for reform. Whether meaningful changes are implemented will play a key role in shaping housing supply over the next decade.