House and land packages have long been pitched to investors as the “easy” entry point into property — stamp duty savings, maximum depreciation, a brand-new asset with nothing to fix. But the latest data from the State of the Housing System 2026 report, released by the National Housing Supply and Affordability Council, paints a more complicated picture of the conditions developers and builders are actually operating in.
For investors weighing up a house and land package against an established property, here are six data-backed reasons why 2026 is a year to slow down and look closely before signing a building contract.
1. The Trades Shortage Hasn’t Gone Away
The HIA Trades Availability Index — which tracks how easy or hard it is for builders to access skilled trades — collapsed from near-neutral readings in late 2020 to its worst level on record by 2022, as the pandemic-era construction boom collided with a shrinking workforce. While the index has clawed back some ground since then, it was still sitting deep in negative territory as at December 2025, well below where it was for most of the late 2010s.
In plain terms: builders are still struggling to secure the carpenters, electricians, plumbers and bricklayers needed to keep projects moving. For an investor locked into a fixed building contract, that translates directly into a higher chance of delays once the slab goes down.
2. Construction Has the Worst Recruitment Difficulty of Any Industry
It’s not just a perception problem. Jobs and Skills Australia’s 2024–25 data shows that 54% of recruiting construction employers in capital cities reported difficulty filling roles, and 53% in regional areas — both noticeably higher than the all-industries average of 47% in capital cities and 51% regionally.
Construction is consistently the hardest sector in the economy to staff. That gap matters for investors because it means builder capacity constraints aren’t a temporary, pandemic-era blip — they’re a structural feature of the industry right now, and structural problems don’t resolve in the time it takes to complete a single build.
3. Builder Insolvencies Are Running Well Above Every Other Sector
This is arguably the most important chart in the whole report for anyone considering a house and land package. ASIC’s 2026 insolvency statistics show construction firm insolvencies climbing from a low of under 1,000 in 2022 to a peak of around 3,600 by mid-2025 — and still sitting above 3,300 as at March 2026. That’s substantially higher than insolvencies in arts and hospitality, retail and wholesale, mining and manufacturing, or transport.
For most property purchases, a seller’s financial position is irrelevant once you’ve settled. With a house and land package, it’s the opposite — your build only happens after you’ve committed, and your builder needs to remain solvent for the full duration of construction. With construction insolvencies elevated above every other industry group tracked, that’s a real and quantifiable counterparty risk, not a hypothetical one.
4. Build Times Have Blown Out Significantly
According to ABS Building Activity data, the average time from approval to completion for a house has stretched from around 9 months through most of the 2014–15 to 2019–20 period to roughly 15 months by 2024–25. Townhouses and apartments have moved even further — apartment completion times have gone from 21 months to over 32 months over the same period.
Every extra month on site is an extra month of holding costs: loan repayments with no rental income, land tax, insurance, and exposure to whatever the market does in the meantime. A package that looked attractive on a 9-month build timeline becomes a meaningfully different financial proposition when it actually takes 15.
5. The Population Growth Tailwind Is Easing
A core argument for buying into new estates is that population growth will drive rental demand. But the Centre for Population’s 2026 forecasts show net overseas migration — the dominant driver of Australia’s population growth in recent years — falling sharply from its 2022–23 and 2023–24 peaks of around 640,000 and 535,000 respectively, down toward a more modest, steady-state forecast of roughly 330,000–350,000 per year from 2026–27 onward.
That’s not a collapse in demand, but it is a clear normalisation from the extraordinary post-border-reopening surge that underpinned rental and land price growth in many growth corridors. Investors modelling future rental demand off 2022–23 conditions in a new estate may be working from numbers the data no longer supports.
6. Material Costs Are Climbing Again
After the extreme cost spikes of 2021–2022 — when the Producer Price Index for detached house materials hit quarterly increases above 4% — input costs had largely settled down through 2023 and 2024. The latest data, however, shows a renewed upward move into 2026, with ceramics and other materials, plumbing products, and other metal products all contributing to a fresh acceleration in build costs.
This compounds directly with the insolvency risk in point 3. Builders operating on fixed-price contracts signed before this latest cost cycle are now squeezed between rising input costs and contracted prices they can’t easily adjust — exactly the conditions that have driven the construction insolvency wave higher in the first place.
What This Means for Investors
None of this means house and land packages are off the table entirely — but it does mean the headline pitch (depreciation benefits, stamp duty concessions, a shiny new asset) needs to be weighed against real, current risks: builder solvency, blown-out timeframes, trade availability, and a softening demand backdrop in some growth-area markets.
Before signing on the dotted line, it’s worth asking some pointed questions: How financially stable is the builder? What does their current insolvency and complaints history look like? What happens contractually if costs rise or timeframes extend? And does the underlying land and location stack up on fundamentals, independent of the building contract attached to it?
BONUS TIP
What no one knows is that 40% of the new built cost are government taxes and there are up to $ 50,000 in sales commission built into the total price. SO THE ONLY PERSON NOT MAKING ANY MONEY OUT OF THE TRANSACTION, IS THE INVESTOR.
This is exactly the kind of due diligence an independent buyer’s agent brings to the table — assessing the asset, the builder, and the contract terms with no financial relationship to the developer or builder recommending the package in the first place.
Sources: HIA Trades Availability Index 2025; Jobs and Skills Australia 2025; ASIC Insolvency Statistics 2026; ABS Building Activity 2025; ABS National, State and Territory Population 2025 and Centre for Population 2026; ABS/CBA/Macrobond PPI data — as compiled in the National Housing Supply and Affordability Council’s State of the Housing System 2026 report.
DISCLAIMER: This is not a professional advice, just for education purposes.
