Many builders have been noticing slower enquiries for months. The official data is now showing the same picture. Private house approvals fell 5.3% in September 2026 and fell in every state (ABS), and on 3 November the Reserve Bank of Australia raised the cash rate to 4.85%, its fifth rise this year. Higher rates reduce how much buyers can borrow, and they arrive just as home values are falling and household confidence is low.
For most construction businesses, the effect will show up over the next 6 to 12 months as fewer new projects and more builders competing for each one. Plenty of businesses are still busy on current jobs, and that is the best time to prepare, while there is still work on the books and time to make changes. The five steps below are the ones we are working through with construction clients now.
When there are fewer projects to go around, the effort a business puts into winning work matters more than it did when enquiries arrived on their own. Many builders have relied on referrals and repeat clients through a busy few years, and a more competitive market may call for a larger and more deliberate investment in sales and marketing.
That investment works best when it is measured. Tracking the enquiries, quotes and signed contracts that come from each channel, whether referrals, the website, social media, paid advertising or relationships with developers and suppliers, shows which channels are producing work and what each one costs. With that view, an owner can put more time and money into the channels that are working and pull back from those that are not.
Competition for fewer projects puts pressure on price, and some builders will cut their margins to keep crews busy. Building costs are still rising at the same time, with new dwelling prices up 4.7% in the year to September 2026 (ABS), and under a fixed-price contract the builder carries any cost increase for the full length of the job.
Job-by-job reporting shows the margin each project is actually earning against the margin in the original quote, and the overheads the business needs to cover each month. From those figures, an owner can work out the minimum margin the business needs on new work, and decide with confidence how far to sharpen a price and when to walk away. A job won below that margin can leave the business in a weaker position than if it had not won the job at all.
In a slower market, cash pressure often comes from timing rather than from a lack of work. A gap between the end of current jobs and the start of new ones, a client who falters partway through a project, or a progress claim that is paid late can all leave the business short of cash in a particular week.
A rolling 13-week cash flow forecast shows when progress claims, retentions, supplier payments, wages and tax obligations fall due, and how job scheduling and any delays would affect working capital. If a tight period is coming, the forecast shows it weeks in advance, which gives the owner time to use the levers available: chasing overdue claims and variations, adjusting the timing of major purchases, reviewing overheads, or arranging finance before it is needed rather than after.
A slower market for new homes may be a reason to look at work slightly outside the usual mix. Smaller, shorter projects such as renovations, extensions, and maintenance and repair work usually turn into cash faster than a new build, which can help keep working capital healthy while larger projects are harder to win. Some owners who are not selling and moving are choosing to improve the home they have instead, and the value of renovation approvals was higher in September 2026 than a year earlier (ABS).
The renovation market is not immune to higher rates and falling home values, and renovation approvals have eased since April, so this is an option to consider carefully rather than a sure opportunity. Each type of work carries its own pricing, supervision and cash flow profile, so it is worth checking that a new type of job will earn the margin the business needs before taking it on.
When cash gets tight, short-term working capital finance arranged through a broker can look like a quick solution, and in the right circumstances it can bridge a genuine timing gap. The terms of these products vary widely, though, and lending for business purposes generally sits outside the consumer credit protections that apply to a home loan. That makes it important to understand exactly what the business is agreeing to before it signs.
These are the points we suggest checking in any short-term finance offer:
The strongest position is to arrange finance early, while the business’s numbers are sound and there is time to compare options, rather than in the week the cash runs short. A 13-week cash flow forecast makes that possible, and we are always happy to review a finance offer with you before you sign.
If you would like a clearer view of your job margins, your cash flow over the coming months, where your new work is coming from, or a second opinion on a finance offer, our construction advisory team can sit down with you, go through your numbers and help you put the right reporting in place.
Book a time to talk with a construction adviser
For more detail on the market, read our articles on the September building approval figures and the November interest rate decision.
This article is general information and is not financial, credit or legal advice for any particular business. Please speak with an adviser about your own circumstances before making decisions about finance.
