Technology can help small and medium builders across Australia to navigate current challenges, an industry leader says.

During an interview with Sourceable, Chris Rennie, Chief Product Officer at cloud-based construction management and estimating software provider Buildxact, talked about current challenges which are facing small and medium sized home building and home renovation companies across the nation.

Rennie also outlined strategies which builders can employ to manage challenges across their business and operations (see below).

According to Rennie, small and medium builders are facing a paradoxical situation.

On one hand, the industry is busy and there is no shortage of work.

At the same time, builders face difficulties associated with trade shortages, the fuel crisis, regulatory compliance and poor productivity.

“It’s really tough,” Rennie said.

“It’s a paradox because from the outside, you feel like there is so much work going on. And they (small and medium builders) feel that as well.

“But in relation to some of the challenges, I don’t think people (outside of the building sector) understand how tough it actually is.”

Challenges despite growth

Rennie’s comments come as Australia’s home building and home renovation industry is going through an interesting period.

On one hand, demand is running hot and builders are enjoying a healthy pipeline of work as mentioned above.

In fact, ABS data indicates that the number of new home commencements across the country is now at four-year highs.

Moving forward, encouraging data relating to new home sales and building approvals suggests that the market will get even busier over the near term.

Beyond new housing, the level of investment in home renovation work is at its highest level on record with the exception of the Commonwealth Homebuilder period.

As also mentioned above, however, small and medium builders face challenges across several areas.

First, a shortage of skilled tradespeople has made it difficult to secure appropriately qualified people to do the work.

In the March quarter edition of its HIA Trades Report released last week, Housing Industry Association (HIA) revealed that trade shortages exists across almost every housing-related occupation category and are evident across all major regions throughout the nation.

Going forward, that report indicated that shortages are likely to intensify further as home building activity continues to strengthen and work associated with major infrastructure projects and the Brisbane Olympics continues to absorb skilled workers.

Next, there is the current fuel situation.

On this score, preliminary results that were released last week from a Master Builders Association survey of builders in Victoria found that almost half of all builders have experienced a surge in overall costs of between six and ten percent since the crisis began.

A further one in five have experienced cost surges of 11 percent or greater.

This is being driven not only by higher fuel costs but also price increases for products relating to plumbing, concrete, steel, facades, electrical supplies and other categories.

This is particularly challenging for builders in terms of their existing projects as many are on fixed price contracts and have either limited or no ability to pass on unexpected cost increases through contract price adjustments.

Third, there are ongoing challenges in terms of approvals and regulatory compliance.

A member survey of small builders conducted by HIA earlier this year found that more than half (53 percent) of all builders needed to spend five hours or more simply complying with red tape.

That same survey found that 45 percent of builders spent more than $10,000 per year on compliance whilst two thirds had considered scaling back or closing their business on account of red tape or compliance burdens.

Rennie says that this is particularly challenging for small and medium builders as they do not have the scale to efficiently productionise compliance management.

Finally, there are long-term challenges associated with productivity.

Whereas many other industries have achieved productivity gains over recent decades, recent data suggests that if anything, the home-building sector has gone backwards.

Last October, Master Builders Australia released an analysis of long run performance in average construction timeframes (from approval to completion) for new dwellings.

According to that analysis, over the thirteen years from 2011/12 until 2024/25:

• the average time which is taken to build a detached house from approval to completion increased by two months to go from 9.21 months in 201/12 to 11.49 months in 2024/25.
• average build times (from approval to completion) for townhouses increased by two months to go from 12.45 months in 2011/12 to 14.82 months in 2024/25
• average approval to completion timeframes for apartments increased by almost one year to go from 20.61 months in 2011/12 to 32.01 months in 2024/25 (see article).

All this means that far from improving productivity, each new home is in fact taking longer to complete.

(far from speeding up, Australian homes are taking longer and longer to build. This indicates that industry productivity is not improving over time. Data: Master Builders Australia, Oct 2025)

Pain points for small and medium businesses

Beyond the macro situation, Rennie says that small and medium residential builders face several ‘pain points’ in managing their projects and businesses.

First, there is estimating.

On this score, Rennie says that builders experience significant challenges in terms of the time taken to prepare estimates and the need to prepare these accurately.

In terms of time, he says that the average SMB builder spends three to five days on each quote. With average ‘win rates’ currently sitting between 15 and 20 percent, builders need to send out five or six of these quotes on average to simply win a single job.

This needs to happen quickly in order to maximise the likelihood of winning each tender.

Meanwhile, estimates need to be accurate so that builders can produce bids which are competitive yet allow for adequate margins and costs. This includes ensuring that they have the correct allowance for material costs and labor inputs.

Moving on to the job site, there are challenges in communication and coordination.

Builders are regularly making and receiving phone calls and texts from subcontractors, tradespeople and homeowners, Rennie says.

A common phenomenon is to have a whiteboard sitting in the site office showing the days on which labour and materials will arrive. This involves interrelationships and moving parts. The date on which the tilers need to come in, for example, depends upon when the waterproofers are available and when the tiles arrive on site.

In another example, a homeowner might ask a site supervisor about whether it is possible to add a skylight. When this happens, it is important that the correct information is captured, recorded and communicated so that the skylight is the right colour, is installed in the correct location and that the builder has a signed variation which reflects its inclusion.

Finally, there is the need to accurately track costs as projects progress.

Over the course of their projects, builders undertake multiple purchases from Bunnings or other hardware stores. This can result in a significant number of paper based receipts accruing in the front of their truck or car.

Unless they are tracking these expenses, it is difficult for builders to keep on top of which projects are on-track and are meeting budget.

(image: AI generated via freepix)

Success strategies

To address these challenges, Rennie suggests three strategies.

He says that software platforms offered by Buildxact and others can help.

1. Thorough and accurate job estimates up front.

First, it is important to ensure that cost estimates on which project bids are based are accurate and include all relevant items.

It is critical to have accurate information up-front as this is the point at which key decisions are made and contract prices are agreed upon.

To help with this, cost estimation software platforms can integrate suppliers and provide live pricing.

The platforms also provide customisable, checklist-style cost estimation templates to help to ensure that all relevant items are covered. This is critical as Rennie says that small and medium builders typically miss around $18,000 worth of items which are left out of the estimates on each job.

2. Improve win rates.

Next, improving win rates enables builders to spend less time chasing work and more time delivering projects.

As mentioned above, builders typically need to prepare five or six estimates for every job won. Any builder who can reduce this to three bids per job secured will unlock significant time and productivity benefits.

On this score, Rennie says that timeliness is critical as those who send estimates within two business days are 32 percent more likely to win the job.

Again, technology can help by providing a streamlined approach to providing quotes and bids using customisable templates. The process can be further speed up through automated material takeoffs and leveraging AI to perform rapid quantity calculations.

These tools replace laborious and time consuming processes which are associated manual, paper-based methods or complex Excel spreadsheets.

3. Improving communication and coordination

Finally, it is important to improve communication and coordination throughout the build process.

Here, cost estimation platforms can help by providing a centralised information hub which acts as a central location for documents, plans, variations and other information.

This provides a single, integrated source of truth which delivers visibility with regard to project progress and communications.

Should a client query a variation, for example, the software will enable the signed document to be easily located, checked and confirmed.

These platforms are usually cloud-based and are available through either desktop or mobile to enable access either at the office or in the field.

Rennie says that having a centralised information hub is critical.

“It really comes down to having one single source of truth,” he said.

“No matter what platform you use, to have that single view to say ‘I know where my projects are, I know whether they are on track, I know that when my client queries the variation, I can say, ‘yep, this is where you agreed to it and you signed off on it.’”

“This is the really significant piece for how technology brings it all together.”

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