Building Trust

Confidence is quietly returning to Australia’s housing market, and with it, activity. After the fastest rate-hiking cycle in a generation, enquiry is up, listings are getting more eyes, and clearance rates have climbed back above 60% in auction-centric cities. For the first time in four years, all eight capitals recorded quarterly house-price growth. The recovery, though, isn’t uniform and understanding where momentum is building (and why) matters for the year ahead. Sentiment, spending and the RBA Three signals are guiding re-entry decisions: inflation, interest rates and consumer confidence. The RBA’s earlier hold at 3.60% was widely expected, but firmer language around Q3 inflation and re-accelerating monthly CPI has softened expectations of an imminent cut, even as the base case still contemplates a move towards ~3.35% if data allows. As household spending lifts with confidence, financing conditions could ease, but the timing may be bumpy, and markets often move ahead of policy shifts. Signals to watch next quarter: Monthly CPI and retail spend prints Auction clearance rates as listing volumes rise Building approvals and commencements relative to the housing-accord run-rate Momentum returns - led by the affordable end The standout feature of this upswing is where the strength sits. Gains are most pronounced at the more affordable 25th percentile, an entrenched yet unusual pattern for Australia. Entry-level stock is absorbing quickly as first-home buyers and investors compete for the same properties, supported by demand-side measures like the expanded Home Guarantee Scheme (5% deposit). Buyer enquiries are rising across the capitals—including previously softer Sydney, Melbourne and Canberra, while views per listing are up and vendor-buyer expectations are reconnecting. City by city: acceleration vs consolidation Sydney and Melbourne have moved into the acceleration phase of the price cycle. Sydney’s median house price has tipped above $1.7 million ; Melbourne, after a multi-year value reset, is accelerating towards an established recovery, aided by population growth. Victoria is forecast to be the fastest-growing state by FY27. Canberra is also quickening. Former pace-setters, such as Adelaide, Brisbane and Perth, are moderating as affordability catches up with momentum. Perth remains within striking distance of the million-dollar median mark, but its rate of change is cooling. The broad takeaway: cities most sensitive to rate expectations are back in the driver’s seat, while last cycle’s leaders consolidate gains. Policy signals and structural shifts Recent signals imply property remains comparatively attractive to some investors versus superannuation, with flow-on effects for the luxury segment and family trusts. More immediate is the pressure at the entry level: the home-guarantee expansion is bringing forward cohorts of first-home buyers and intensifying competition for precisely the stock preferred by yield-seeking investors. Without a stronger supply response, expect persistent pressure in lower price bands. Supply, tax and the productivity of existing stock Here, the constraints are stubborn. Housing is among the most taxed sectors (taxes can account for up to 40% of a new home’s cost), and stamp duty dampens mobility, contributing to under-utilisation (Australia averages 2.3 bedrooms per person). Reform ideas gaining traction include reducing taxes on new builds, transitioning from stamp duty to a broad land tax, and including the family home in the pension test to encourage right-sizing. New supply is the taller order. Population growth is outpacing dwelling delivery, most states are behind their targets, and approvals are well below the ~240,000 homes a year needed to meet the five-year housing accord. Without faster planning and lower soft costs, demand relief risks turning into price pressure rather than improved affordability. Infrastructure: uplift is real if hyper-local Transport infrastructure typically lifts values most within 0–400 metres of stations, with the bulk of the price response occurring between announcement and construction. Units often see sharper, earlier gains that fade faster; houses accumulate value more slowly and tend to hold it better. In practice, micro-location, timing and land-use settings are decisive. The new shape of demand Search behaviour tells a story: “granny flat” is now Sydney’s number-one term and rising across all capitals, reflecting affordability pressures, multi-generational living and rental-income strategies. Build-to-Rent is scaling towards an expected 70,000 units by 2030 , adding institutional-grade rental supply that should ease pressure at the margin. Risk pricing is maturing, too. Buyers increasingly factor bushfire and riverine flood exposure into offers, while many ocean-adjacent assets still attract premiums despite limited pricing of coastal-erosion risk. Expect this to evolve as disclosures standardise and insurance dynamics shift. Regions: normalising after the surge The pandemic-era regional wave has eased. Demand remains, but not at 2020–22 levels. Sydney’s affordability challenges continue to nudge young families toward more affordable capitals and select regional hubs, yet as Sydney and Melbourne re-accelerate, their gravitational pull on talent, jobs and development pipelines is reasserting itself. Practical takeaways Buyers: Have finance ready, scrutinise flood and fire risk, and weigh near-term infrastructure timelines when assessing micro-locations. Sellers: Depth is returning - well-located, right-sized stock priced realistically in the first fortnight is attracting decisive bidding. Investors: Focus on yield plus flexibility - granny-flat potential, station-proximate assets and locations that hold value through rate cycles. Developers & policymakers: Pair faster approvals and lower soft costs with mobility-friendly tax settings to turn confidence into sustainable affordability. At Design & Build, we operate where market demand meets delivery capacity. If you’re reshaping product for affordability, scaling project teams or navigating approvals, our specialists can help align people, timelines and market realities, so momentum turns into outcomes.  By Andrew McGregor, D&B Managing Director

While the Australian national Construction activity rose by 3.5% in 2025, this growth has been uneven, driven by smaller, specialised builds rather than a consistent pipeline of major projects. Traditional commercial and residential construction has slowed under the weight of high interest rates and cautious investment, while sectors like health, education, data infrastructure and renewables continue to receive targeted funding. Geographically, Queensland and Western Australia are showing resilience and opportunity, while other states like New South Wales and Victoria are contending with softer demand and tighter budgets. But what truly defines this moment in the market isn’t just the work; it’s the workforce. The competition for skilled professionals has intensified, and their expectations are more complex than ever. Salary alone won’t guarantee commitment. Employers must now balance flexibility, culture, progression and communication or risk losing their best people to those who do. Backed by one of the country’s most comprehensive workforce datasets, drawn from over 1,600 professionals across Civil, Commercial, Residential Construction and Engineering, our latest Salary Guides reveal a clear message: talent expectations are evolving faster than most employers are prepared for. While project pipelines are still there, the professionals needed to deliver them are increasingly mobile, discerning, and driven by more than just salary. Progression Pathways Are Failing And That’s Fueling Attrition Let’s be blunt: the current rate of internal promotion is undermining workforce stability. Only 13% of professionals in Commercial Construction and 15% in Residential were promoted in the past year. In Civil, even with its experienced workforce, only 29% have progressed internally at all. This stagnation is fuelling turnover with 8 in 10 professionals across Construction & Engineering open to a move. When talent feels that growth is tied to changing employers, loyalty erodes, and your investment in onboarding, development, and culture walks out the door. What you should be doing now: Formalise internal career frameworks with visible pathways. Communicate these pathways early — especially during onboarding. Recognise lateral progression too: title clarity and scope expansion matter. Structured development doesn’t just retain talent, but also motivates them. And in a market where everyone is hiring, motivation is currency. Pay Matters, But Clarity Matters More Pay rises occurred across the board — 47% of Commercial and Civil professionals received one last year. But here's the issue: most people still feel underpaid. In fact, more than half of all surveyed professionals either think they’re below market or aren’t sure at all. This perception gap is dangerous. It creates mistrust, fuels passive job searches, and positions your competitors to swoop in with seemingly small salary bumps that feel significantly more appreciated. Recommendations: Benchmark salaries regularly, and share ranges internally. Clarify how pay decisions are made — don’t let the process feel opaque. Don’t rely solely on your base salary. Bonuses, even small ones, signal performance recognition. Our data shows that between 29% and 43% of professionals across these sectors expect a raise in FY25/26, but nearly half are unsure . That uncertainty is your opportunity to lead with transparency and honest communication. Flexibility is Slowly Gaining Ground Across every sector surveyed, the message was the same: professionals are craving flexibility, even in environments where on-site work is a core requirement. While most construction roles still require a strong physical presence, nearly a third of professionals now expect at least some hybrid option — and that includes engineers, supervisors, estimators and planners. Yet only: 26% of Civil professionals report having hybrid work access 32% of Residential and Engineering respondents have hybrid roles. 23% of Commercial Construction professionals are hybrid Interestingly, the Energy & Infrastructure sector appears to be leading the way, with 51% of its workforce reporting access to hybrid arrangements. This reflects an industry that has embraced the operational and wellbeing benefits of flexibility, especially for design, planning, and project management functions. It’s a clear example of how even traditionally site-heavy industries can find a workable balance that supports both performance and lifestyle. What you should be doing now: Introduce partial flexibility for admin or coordination roles. Offer adjusted rosters or start times — even small tweaks matter. Promote flexibility as part of your EVP. If you’re offering it but not advertising it, you're missing candidates. This is no longer about location. It’s about trust, lifestyle, and how you show you care. Retention Starts With Listening In Civil, Commercial, and Engineering sectors, salary still leads, but around 20% of professionals say flexibility is their next priority when considering a career move. For these sectors, the ability to work hybrid or adjust schedules is becoming just as important as compensation. Most professionals want practical benefits like health insurance, flexibility, and mental health support — but many are still only offered outdated perks. Aligning your benefits with what people truly value can be the difference between keeping talent and losing it. Recruitment Strategy Can’t Be Transactional Anymore With only 19% of Commercial professionals moving via internal promotion, the majority of career moves are happening externally. This is where recruitment partners make the difference. The best recruiters are tapping into passive talent, professionals who aren’t actively looking but will move for the right opportunity. They know who’s quietly open to change, what motivates them, and how to engage them before your competitors do. If you’re relying solely on job ads and inbound applications, you’re missing the majority of the market. Final Thoughts The good news? There’s no shortage of work. Investment is still flowing. Projects are still moving. But the industry is at an inflection point. The difference between businesses that thrive and those that stall won’t be about contracts won; it’ll be about talent kept. At Design & Build, we’ve supported this industry for 20 years, and what’s clear is that those who invest in their people, adapt to the market, and treat talent as a long-term asset always come out ahead. If you’d like to unpack what these findings mean for your workforce strategy, reach out. We’re ready to help. Click here to check all our Salary Guides for 2025-26. Andrew McGregor Managing Director, Design & Build Recruitment

The anticipated 'Great Resignation' has not materialised in recent years. Instead, we are witnessing what can be termed the 'Great Stay,' characterised by historically low unemployment rates and a scarcity of available candidates. This trend underscores the critical importance of decisiveness in your hiring processes. Current Labour Market Landscape According to the latest report from the Australian Bureau of Statistics , the unemployment rate stands at 4.1% , with a participation rate of 67.3% , which shows that most of the eligible workforce is already employed or actively engaged in the job market. Employment has increased by approximately 444,400 people over the past year, with two-thirds of these gains in full-time positions. Despite a 10.3% decline in job vacancies over the year, they remain 51% above pre-pandemic levels, indicating sustained demand for talent.​ Also, as shown in our latest Talent Trends Whitepaper , 88% of companies plan to continue hiring despite economic uncertainty, which means that competition for top candidates is fierce. Consequences of a Prolonged Hiring Process In this competitive environment, a slow hiring process can have several detrimental effects: Losing top talent – Skilled candidates often receive multiple offers and won’t wait long to make a decision. Higher operational costs – A vacant role costs up to six months’ worth of salary in lost productivity and hiring expenses. Weakened employer brand – A slow, disorganised hiring process can frustrate candidates and impact future recruitment efforts. Recommendations for Employers To attract and retain top talent in the current market, consider the following strategies: Streamline Recruitment Processes : Simplify application procedures and reduce unnecessary steps to expedite decision-making.​ Improve Candidate Engagement : Maintain regular contact with candidates to keep them engaged and informed throughout the hiring process.​ Competitive Salaries & Work-Life Blend – 44% of candidates say a better salary is their top motivator to change jobs, while 34% cite improved work-life balance as a key factor. Learn more about it in our Talent Retention Whitepaper . Career Growth & Development – Candidates are increasingly prioritising clear career pathways, mentorship, and upskilling opportunities when choosing an employer. Leverage Technology : Utilise recruitment software and platforms to efficiently manage applications and communications.​ Empower Hiring Managers : Provide training to ensure they can make swift, informed decisions without unnecessary delays.​ By implementing these strategies, your organisation can stay ahead in the race for talent and build a workforce that supports long-term success. Would you like a tailored consultation on optimising your hiring strategy? By partnering with us , we guarantee to follow all the best practices mentioned above through streamlined processes, cutting-edge technology and enhanced communications.