Residential builders and trades are holding back on hiring in 2026, not because of a lack of work, but due to rising costs, regulatory hurdles and persistent skills shortages, according to the Housing Industry Association (HIA).

Research from the HIA indicates that 73% of surveyed members do not plan to employ additional staff this financial year, while only 27% expect to grow their workforce.

“Builders are ready to bring more people into the industry, including apprentices and skilled trades, but current conditions make it difficult to do so with confidence. This is about managing risk and capacity, not a lack of work or willingness to employ,” HIA managing director Jocelyn Martin says.

The survey also found that 67% of small business members report difficulties recruiting or retaining skilled staff, while 56% have had to redirect staff time to manage regulatory and compliance requirements.

“These results contrast with more positive employment expectations in other sectors, highlighting the unique pressures facing residential construction,” Jocelyn says.

“Training apprentices and developing skills takes time, stability and certainty. When businesses are dealing with delayed approvals, inconsistent regulation and rising costs such as insurance and workers compensation, it becomes much harder to invest in long-term workforce development.”

The HIA also noted that the administrative and compliance burden for hiring, managing and training apprentices is disproportionately higher for small businesses without dedicated human resource teams. Availability and cost of skilled labour ranked among the top five pressures for builders, at 62% and 61% respectively.

The HIA is calling for streamlined planning systems, reduced regulatory duplication and stronger skills pathways to give builders the confidence to hire, train and retain more workers.

“Getting these settings right is essential if we are serious about increasing housing supply. With the right policy environment, the home building industry can strengthen its skilled workforce, grow employment and play a leading role in addressing Australia’s housing needs,” Jocelyn says.