The 2026 Small Business Conditions Report paints a picture of a small business sector under pressure, according to the Housing Industry Association.
The report is a survey of HIA members who work in the building sector and identify as a small business.
HIA Managing Director Jocelyn Martin said it was not only a gauge of the level of sentiment in small business, but also a measure of how the home building sector may be performing from 2026 onwards,.
“Small building businesses are the engine room of Australia’s home building industry, but they are being asked to do more with less – facing rising insurance premiums, growing compliance obligations and planning delays that are stretching cashflow and eroding confidence,” she said.
“The survey found 68 per cent of respondents have considered scaling back or closing their business due to red tape and compliance burdens, while almost three-quarters do not expect to take on additional staff in the year ahead.
“Planning delays are a barrier to productivity, with 88 per cent of small builders reporting approval time frames exceeding eight weeks, and one in three experiencing delays of more than six months.
“For small businesses, time is money and lengthy approval processes mean higher holding costs, delayed starts, and increased financial risk, which reduces the number of homes that can be delivered.
“The survey also highlights persistent workforce challenges, with 67 per cent of small builders reporting difficulty recruiting or retaining skilled workers, limiting their ability to expand operations or take on new projects.
“Compliance pressures continue to mount, with more than half of small builders spending at least five hours a week on regulatory tasks, and nearly one-third spending more than ten hours.”
Other findings included:
- 59 per cent indicated they do not expect to have a more profitable year in 2025/26 than the previous year.
- 63 per cent of respondents said that NCC 2025 changes had either a moderate or major impact on their business.
- 88 per cent of respondents reported having an increase in personal stress as a result of increasing compliance burdens and red tape.
- 56 per cent of small businesses having hired new, or redeployed existing staff, to manage administrative or regulatory tasks.
“Streamlining planning systems, reducing compliance burdens, and providing greater regulatory certainty would immediately improve productivity across the small business sector,” Jocelyn said.
“Targeted support for apprentices, skills pathways, and technology adoption would help small builders expand their workforce and lift output.
“With the right policy settings, small building businesses will play a central role in delivering more homes faster, but without reform, housing supply will continue to fall short.”
