Quick answer
On 1 October 2026, Master Builders Australia cut its forecast for new home starts over the five years to 2030–31 by 8.4%, to under 920,000. That's about 62,000 fewer than it forecast in March. Non-residential building is still forecast at $331 billion (up 2.9%) and civil work at $688 billion, and the industry remains about 141,000 workers short. For builders, that means less certainty, a shift in where the work is, and a stronger case for a flexible workforce.
Master Builders Australia released its latest building and construction forecasts on 1 October 2026, and the headline is a sharp downgrade for new homes. Work outside housing is holding up better, and the industry is still short of workers. Here's what that means if you're planning crews for the next 12–24 months in Victoria, Queensland or New South Wales.
What did Master Builders forecast?
| Sector | Forecast (5 years to 2030–31) | Change | What it means for labour |
|---|---|---|---|
| New homes (residential) | Under 920,000 starts | Down 8.4% on the March 2026 forecast (about 62,000 fewer starts) | Less steady residential pipeline; more stop-start demand for carpenters, labourers and finishing trades |
| Non-residential building | $331 billion | Up 2.9% on the previous five years | Steady demand for commercial trades, shopfitters, electricians and ticketed operators |
| Engineering & civil | $688 billion | Resources and utilities strongest; transport and recreation declining | Civil crews, plant operators, traffic control and riggers stay in demand |
Master Builders also flagged data centres as an emerging feature of the non-residential market. It estimates the industry will fall about 262,000 homes short of the National Housing Accord target.
Why were the forecasts cut?
Master Builders' Chief Economist Shane Garrett attributed the downgrade to four main factors:
- Federal Budget policy decisions from May 2026.
- Interest rate rises. The Reserve Bank lifted the cash rate to 4.60% in September 2026, its fourth increase of the year and the highest level in about 15 years.
- An unfavourable geopolitical environment.
- Limited improvement in industry capacity to deliver more work.
Garrett described new home builders as being "in the eye of a perfect storm". Master Builders CEO Denita Wawn separately warned that high rates, rising materials prices and labour shortages mean the cost of building a new home now exceeds its likely sale price in many cases.
If work is slowing, why is labour still short?
A softer housing forecast doesn't mean surplus workers. In September 2026, Master Builders said the industry is about 141,000 construction workers short, and warned the gap could grow to almost one million by 2035 without action. Garrett noted the industry still can't find enough site-ready workers, even though the broader jobs market has softened.
So builders face two pressures at once: less predictable volumes and a tight pool of skilled, ticketed people. That combination makes it riskier to over-hire permanently and harder to find good workers quickly when a stage ramps up.
What should builders do about labour now?
- Keep a lean permanent core. Hold on to your key supervisors and leading hands, and flex the rest of the crew to each project stage.
- Book labour by stage, not by year. Map your program's peaks (frame, formwork pours, fit-out, handover) and line up workers early for those windows.
- Follow the work across sectors. If your pipeline is tilting from housing towards commercial, civil or data-centre work, check you'll have the tickets those sites need: EWP, rigging, dogging, traffic control and electrical.
- Protect margins on fixed-price jobs. Labour hire turns labour into a known hourly cost with no recruitment, redundancy or idle-time costs when a job slips.
- Stay compliant. In Victoria and Queensland, you must use a licensed labour hire provider.
How Dash Group can help
Dash Group supplies licensed, vetted, site-ready labourers, trades and ticketed operators across Victoria, New South Wales and Queensland. Workers are often on site within 2–4 hours, and each client has one dedicated consultant from booking to finish. Only about 3 in 10 applicants pass our vetting. We are licensed under the Labour Hire Licensing Act 2018 (Vic) and the Labour Hire Licensing Act 2017 (Qld). For indicative rates by trade, see how much labour hire costs per hour in 2026, or talk to our Melbourne, Brisbane or Gold Coast team.
Frequently asked questions
What did Master Builders forecast in October 2026?
Master Builders Australia's 1 October 2026 forecast expects fewer than 920,000 new home starts in the five years to 2030–31, an 8.4% downgrade from its March 2026 forecast. It expects $331 billion of non-residential building work (up 2.9% on the previous five years) and $688 billion of engineering and civil construction.
Why were the construction forecasts cut?
Master Builders points to policy decisions in the May 2026 Federal Budget, continued interest rate rises, an unfavourable geopolitical environment and limited improvement in the industry's supply-side capacity. The Reserve Bank lifted the cash rate to 4.60% in September 2026, its fourth increase of the year.
Is there still a construction labour shortage?
Yes. In September 2026 Master Builders said the industry is about 141,000 workers short, with the shortfall forecast to grow to almost one million by 2035 if nothing changes.
Should builders hire permanent staff or use labour hire right now?
With forecasts moving and work shifting between sectors, many builders keep a smaller permanent core and use labour hire to add workers for specific stages and peaks. That way you pay only for the hours you need and can scale down without redundancy costs.
Sources: Master Builders Australia, "Construction forecasts slashed as policy and economic shocks take toll" (1 October 2026); Master Builders Australia, "New labour force data release following warnings that construction is 141,000 workers short" (24 September 2026); Master Builders Australia, "Builders: project viability hit again by interest rate rise" (September 2026); CommBank: RBA raises cash rate to 4.60% (September 2026). Dash Group is not affiliated with Master Builders Australia.