Most small and medium-sized builders say the rising cost of insurance is the biggest pressure on their business, a new Housing Industry Association survey has found.

The association has called for a Productivity Commission review of insurance cost increases over the past five years after 72% of survey respondents selected the issue from a list of stressors.

Insurance price rises led the poll ahead of the time and cost of planning approvals (second on 63%); availability and cost of skilled labour; code compliance; managing cash flow; keeping staff employed; and energy costs. 

“[Builders] are being asked to do more with less – facing rising insurance premiums, growing compliance obligations and planning delays that are stretching cash flow and eroding confidence,” association MD Jocelyn Martin said.

“Operating pressures are weighing heavily on small builders. Labour, insurance, finance and compliance costs remain elevated.”

In NSW, 79% of respondents picked insurance premium rises as the top problem; 86% in Victoria said the same.

“As a small builder and property developer, it is currently not feasible to continue operating due to the rising costs of construction, insurance, red tape and land tax,” one small builder surveyed said.  

Another said: “It really is getting harder to stay afloat. The costs of materials, labour, insurances and all of the other operating expenses have increased.”

The Housing Industry Association says Australia’s largest 100 builders deliver about one-third of “dwelling starts”, highlighting “just how critical small and medium-sized builders are” in meeting national housing targets.