How construction technology can help solve Australia's housing crisis

As Australians face one of the worst housing crises in generations, the dream of home ownership is slipping away for many.

Stories of rental bidding wars, families living in cars and young professionals giving up on ever owning a home have become distressingly common.

At the heart of this national emergency lies a productivity crisis in our construction industry that few are talking about – even during election season.

While politicians debate tax cuts, zoning changes and first-home buyer schemes, none address the fundamental issue.

Australia simply can't build homes fast enough because our construction productivity has collapsed.

This invisible crisis is driving up housing costs, reducing availability and creating major delays that affect everyday Australians, while draining billions from our economy.

Despite a 25 per cent increase in construction workers since 2013, they're working two per cent fewer hours and producing 25.4 per cent less output, according to recent Productivity Commission data.

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This isn't a temporary dip – it's a systemic problem that's been getting worse. Construction productivity has been declining steadily since its 2014 peak, falling to levels not seen since the 1990s.

In the residential sector, the situation is particularly dire: the number of homes completed per hour worked has plummeted by 53 per cent over three decades.

And the financial impact is staggering.

Three decades of weak productivity in construction cost Australia $AU56 billion in potential output in the 2022 financial year alone, according to Oxford Economics.

This significant shortfall stems from the sector's poor productivity performance since 1990 when compared to other major industries like mining, manufacturing and financial services.

To understand the scale of this decline, consider this: if the broader economy's labour productivity had fallen as sharply as the housing construction sector's, average Australian income would be 41 per cent lower than it is today.

Promising solutions

Artificial intelligence (AI) and automation offer promising solutions, particularly when integrated with Building Information Modelling (BIM) and robotics.

The technology is already here in Australia, with local innovation leading the way.

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Australian robotics company, FBR Limited, has developed brick-laying robots that work consistently and safely, while Melbourne-based Sync/Hickory's smart factories use assembly-line principles to manufacture building components off-site, significantly reducing construction time and errors.

In Western Australia, Contec's advanced 3D concrete printing technology shows promise to potentially transform Perth's housing market by offering a faster and more cost-effective way to construct homes.

If successful, this approach could help address the city's housing challenges through more durable and sustainable building methods.

What's missing isn't Australian ingenuity or technological capability – it's the institutional support and industry-wide adoption needed to scale these innovations.

Without significant investment in both technology and education that prepares workers to use them, these promising solutions remain isolated success stories rather than industry transformers.

AI and automation

Construction technology (ConTech) companies are emerging as crucial drivers of this essential transformation. The rapid growth of the sector reflects its transformative potential.

And its market size is projected to grow significantly.

In 2025, it’s estimated at $US5.6 billion. That figure is expected to grow to $US10.34 billion by 2030, with a compound annual growth rate (CAGR) of 12.8 per cent during that period.

This exponential growth signals the industry's confidence in technology-driven solutions and the great potential of ConTech as an emerging sector, particularly when it comes to the construction industry.

However, this is a technological revolution that comes with a crucial challenge: job displacement.

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While AI and automation will improve efficiency and productivity, there will be an inevitable reduction in the need for traditional construction workers.

But it also presents an opportunity.

The expanding ConTech sector offers new employment possibilities for construction professionals who are trained to adapt and acquire new skills. The key is to view ConTech not just as a driver of automation, but as a growing source of employment.

This emerging sector needs professionals who understand both construction and technology – presenting a viable career path for those affected by automation and new graduates entering the industry.

The future of construction education

The construction industry's future lies in embracing these technological solutions while preparing its workforce for new roles in ConTech.

This transition is essential for tackling the industry's low productivity and wasteful operations, as well as for securing ongoing employment opportunities for construction professionals in an increasingly digitised and automated landscape.

To do this, we need to ensure workers aren't left behind, we need to rethink how we prepare the construction workforce for an automated future.

The construction education sector faces two main challenges.

Firstly, the adoption of innovative technologies like AI remains slow, largely because existing curricula are already crowded with traditional subjects. This leaves little room for educators to incorporate new topics that would give students current industry knowledge.

Secondly, while we can effectively deliver foundational knowledge, it often falls short of developing the critical thinking and problem-solving skills needed in today's dynamic construction technology landscape.

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Embracing entrepreneurial thinking

Traditional assessments often fail to reflect real-world scenarios where professionals must navigate uncertainty and incomplete information.

Construction education needs to embrace entrepreneurial thinking to prepare graduates for this evolving sector.

Rather than simply training students to follow procedures, programs should develop capabilities in handling uncertainty, spotting opportunities and creating innovative solutions.

This approach aligns with broader educational trends.

The Organisation for Economic Co-operation and Development (OECD) has found that entrepreneurship education not only drives economic growth and job creation but also boosts student engagement and personal development.

Australia has not kept pace with other nations like the US (63 per cent of ConTech unicorns are based there), Europe and Israel in fully integrating and leveraging the potential of ConTech to drive significant improvements.

The Australian construction industry stands at a crossroads.

Without significant changes to both industry practices and education, Australia risks falling further behind in construction productivity, potentially exacerbating housing affordability issues and economic inefficiencies.

The solution lies in embracing technological innovation while nurturing a new generation of construction professionals who can drive transformation.

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The question isn't whether change will come, but whether our educational institutions can adapt quickly enough to prepare the workforce that will lead this revolution.

The future of Australia's construction industry depends not just on adopting new technologies, but on fostering the entrepreneurial mindsets needed to imagine and implement innovative solutions to our long-standing housing challenges.