Australia’s residential construction sector is slowing, with the latest Australian Bureau of Statistics (ABS) data showing that activity is down across the board. In the June 2025 quarter, housing commencements fell by 4.4 per cent, while completions dropped by 6.5 per cent. Across the 2024–25 financial year, only 174,030 homes were completed, well short of the federal government’s Housing Accord target of 240,000 homes a year.
These results mark the weakest construction quarter in more than a decade. Rising costs, ongoing labour shortages, and tighter financial conditions are putting sustained pressure on the industry. At the same time, population growth remains strong, with net overseas migration at record highs. The result is a widening gap between housing supply and demand, pushing rents higher and tightening availability across every major market.
The sector is also bracing for further strain on the supply chain as preparations ramp up for the 2032 Brisbane Olympics. Demand for materials, trades, and logistics capacity is expected to increase sharply in Queensland – and flow through to other states – intensifying competition for resources and driving up costs nationally.
Developers are reporting fewer large-scale projects in the pipeline, with some subcontractors scaling back their teams as work slows. Apprenticeship completions have fallen to their lowest level in ten years, raising questions about future workforce capacity.
For construction businesses, these conditions reinforce the need for sharper financial control and proactive planning. Reduced project flow, slower payments, and rising input costs are all tightening cash flow and margins. At the same time, talent retention has become critical – as businesses that can hold on to skilled workers will be far better positioned to meet demand when the market rebounds and Olympic-related infrastructure activity peaks.
At Xact Accounting, we work with construction businesses every day to strengthen their financial systems and decision-making frameworks. Here’s how we’re helping clients build resilience in a tougher market:
While the ABS data paints a challenging picture, periods like this often reward businesses that prepare early. Construction companies that prioritise efficiency, financial discipline, and strategic planning now, while also investing in retaining and developing key people, will be best placed to take advantage when the market rebounds.
At Xact Accounting, we’ve built our reputation on helping construction businesses professionalise their operations and navigate complex cycles with confidence. We understand the daily pressures of managing cash flow, meeting compliance obligations, and maintaining profitability when market conditions tighten.
Now is the time to take control of your numbers and plan ahead. The businesses that do – and that keep their best people on board – will emerge stronger, clearer, and more capable when the next upswing begins.
Talk to us today about strengthening your financial control and building a plan for the next phase of the market.
