Australia’s Construction Outlook: What to Expect in the Next 5 Years (2025–2030)

Australia’s construction industry enters 2025 at a turning point. Government housing and infrastructure ambitions remain huge, while builders juggle costs, approvals, labour, and new sustainability standards. Recent ABS data shows June 2025 dwelling approvals rose 11.9% month-on-month (apartments up 33.1%), and non-residential approvals value jumped 15%, suggesting a gradually firming pipeline.

Housing demand & targets. The National Housing Accord sets an aspiration to build 1.2 million homes from mid-2024 to mid-2029, with funding to support delivery. But multiple analysts now call the target “aspirational”, noting build-phase bottlenecks and capacity constraints. 

Population trends. Population growth remains strong even as net overseas migration eases from the 2023–24 peak. That still means sustained underlying housing demand, especially in growth corridors. 

Costs & productivity. Escalation has cooled from its peak yet remains uneven across trades and materials. Industry outlooks point to state-by-state differences and ongoing productivity pressure — a key risk (and opportunity) over the next cycle.

Regulation & sustainability. Energy standards are rising: the NCC uplift to ~7-Star and “Whole-of-Home” assessments are rolling through jurisdictions, nudging design choices and appliance selections, and reshaping cost stacks. 

Where the market is headed.

• More apartments & infill to unlock supply near transport. 

• Design for delivery (prefab, modular, mass timber) to fight labour and time constraints. 

• Lower-carbon materials becoming mainstream via policy and client demand. 

What builders can do now: invest in pre-construction planning, line up supply chains early, adopt digital QA/approvals tools, and price in energy-standard changes. The rewards will accrue to teams that can compress timelines, document transparently, and prove carbon performance.

The big picture

Australia enters 2025 balancing strong housing demand with capacity constraints. Expect more medium-density and apartments, persistent labour tightness, and steady adoption of lower-carbon design.

5 trends to watch

1. Apartment rebound & infill near transport.

2. Prefab/modular to compress timelines.

3. 7-Star energy & Whole-of-Home shaping design choices.

4. Low-carbon materials (LCC concretes, mass timber) moving mainstream.

5. Digital delivery (QA apps, model-based coordination) improves productivity.

   
   

What this means for builders and clients

• Lock in suppliers early and design for manufacture/assembly.

• Communicate lifetime running-cost benefits from energy-efficient homes.

• Track embodied carbon in specs and tenders.