Building productivity has been sinking like a brick as report calls for National Construction Code shake up

Australian builders are finishing half as many homes per hour as they were 30 years ago, prompting a top economic umpire to demand red tape be shredded to fix the housing crisis.

Construction has “consistently” under-performed the rest of the economy over that period, the Productivity Commission warned in a new report to be released Monday.

That malaise has added to costs, worsened the shortage of houses, and pushed the “Australian dream” further out of reach through surging prices.

It means the Federal Government will need to shake up the $83 billion sector to have any hope of hitting a national target to build 1.2 million new properties by 2030.

High on the Commission’s list for reform targets was the 2000-page National Construction Code, and the report called for a pause on updates to the builder’s rule book.

The Commission wants the NCC reviewed after a wave of regulations — including energy efficiency rules — added to building costs yet failed to deliver benefits to the community,

Productivity Commission chair Danielle Wood said “the sheer volume of regulation” had a deadening effect on the industry.

“If governments are serious about getting more homes built, then they need to think harder about how their decisions unnecessarily restrict housing development and slow down the rate of new home building,” she said.

A lack of innovation, slow regulators, and the dominance of small building firms also slowed productivity, the report said.

Workers have been hoovered up by infrastructure projects and tradies struggle to switch States due to restrictions on their licences

Major projects can take 10 years to move from planning to completion, the analysis found.

Building a home will need 10 months from slab to finish, up from six months in 2014.

Boosting productivity would mean more homes could be built with fewer hours worked.

“Too many Australians, particularly younger Australians, are struggling to afford a home in which to live,” Ms Wood said.

“Governments are rightly focused on changing planning rules to boost the supply of new homes, but the speed and cost of new builds also matters.

“Lifting the productivity of home building will deliver more homes, regardless of what is happening with the workforce, interest rates, or (material) costs.”

But the report also acknowledged Australia was not the only country with falling productivity in building — and far from the worst.

Master Builders Australia chief Denita Wawn said there would be “no silver bullet to solving woeful productivity in the industry”.

“Every day we drag our heels on tackling the challenges faced in the industry, the longer we drag out the housing crisis,” Ms Wawn said.

She backed the Commission’s recommendations and said they should be considered by governments.

Western Australia has been ground zero for the building bubble, and housing remains a key battleground ahead of the State election on March 8.

The price tag for a new home surged 19 per cent in Perth through 2024, according to REA Group, while The West Australian revealed last week that building costs had tripled since 1999.

About 21,000 new dwellings were approved in WA last year, yet lobbyists have warned many remain stalled amid high construction costs.