Just 23% Say Their New Build Finished on Time. On a Construction Loan, the Delay Lands on Your File Too

On 17 September Equifax and its construction rating business iCIRT published a new index built on YouGov polling. Of the Australians who managed or followed a new home build in the past year, just 23% said it finished on time. Two days earlier, the Housing Industry Association (HIA) reported that new home sales fell 10.0% in August, and that cancellation rates are rising. For brokers with construction loans in the pipeline, the risk to plan for is not only a builder failing. It is a build that runs late, costs more than quoted, and leaves the assessment on your file out of date.

What the two releases actually say

The iCIRT Construction Index: Capacity Report is the first in a new series. It combines a YouGov survey of 1,063 Australian adults (fieldwork 30 July to 4 August 2026, weighted to census profiles) with Equifax commercial credit data. Read the headline number carefully. The 23% comes from respondents who managed or followed an active project in the past year and said it was completed on schedule. It is a self-reported figure, not an audited completion rate. It is still the clearest recent snapshot of how build timelines are going for households. The figure for major renovations was slightly better, at 29%.

The survey puts the biggest hold-up at the start of a build, not the end. Planning approvals and site preparation, including council delays and excavation, were named by 22% of respondents. That compares with 11% for structural framing and 12% for internal fit-outs. Seven in ten (71%) said worker shortages somewhat or critically delay new housing completions.

“The delivery bottleneck is not occurring at the tail-end of builds; it is stalling right at the front gate with council planning and site preparation,” said Brad Walters, General Manager Commercial at Equifax Australia. “When you overlay these factors with trade and skilled worker shortages, and rising construction costs, projects can inevitably run over time and over budget.”

The credit data explains why trade capacity is shrinking. Equifax’s Business Market Pulse for the June quarter of 2026 shows:

• SME construction credit demand fell 3.8% year on year, while large construction firms grew theirs by 3%
• SME asset finance and growth capital fell 6.5%
• Small trade business exits rose 58.0% and new small trade entrants fell 19.0%
• Overall construction company exits rose 114.0%
• New ATO tax default disclosures in construction rose 43.0%, SME insolvencies rose 9.0% and early trade payment arrears rose 4.7%

HIA’s New Home Sales report, released on 15 September, covers the demand side. Sales of new homes fell 10.0% in August. Sales for the three months to August were 19.3% lower than the previous quarter and 7.7% lower than a year earlier. Sales fell over that period in all five states the survey covers: Victoria (-27.0%), Queensland (-20.2%), New South Wales (-17.5%), South Australia (-10.8%) and Western Australia (-8.2%). HIA Chief Economist Tim Reardon said builders are reporting “weaker traffic through display sites, fewer enquiries and declining preliminary commitments, while cancellation rates are rising.” He also said that “falling established home prices and rising construction costs … are making new home projects increasingly difficult to finance.”

Why the delay matters more than the headline

A construction loan does not settle in one go. Funds are usually released in progress payments as the build reaches each stage, and the borrower is often paying for somewhere to live at the same time. A delayed build keeps both of those costs running for longer. It also creates three problems a broker can see coming.

1. The household buffer is thinner than the quote assumes

The same survey found that more than a third of Australians (35%) could absorb a cost variance of no more than 1% to 5% before they would delay, scale back or suspend a new home build. Only 5% to 7% said they could absorb increases above 15%. On a build where the contract price is the whole budget, a variation, a price rise or a few extra months of rent can use up that margin quickly. The loan was approved for the quoted amount. The shortfall has to come from the client.

2. The rate environment has shifted during the build

HIA points to three interest rate increases this year, which have reduced borrowing capacity and raised repayments. A client who was assessed at the start of a build may now face higher repayments before the house is finished. Loan Market credit expert Shay Waraker, commenting on the aggregator’s August data reported by The Adviser, warned that “if the cash rate does increase again this year as many economists have predicted, borrowing capacities will be impacted.” The same Loan Market data showed investor pre-approvals down 55% year on year in August. That comes from one source, but it is a sign that fewer new projects are starting.

3. The builder’s balance sheet is now part of the risk

The Equifax figures do not name any business, and this article does not suggest that any particular builder is at risk. But when small trade exits are up 58% and construction company exits have more than doubled, the subcontractors a builder depends on are under strain, and that affects how long the build takes. Walters said SME builders are “deferring equipment investment, likely to protect working capital.” When a builder has less working capital, delays at one stage are more likely to hold up the next.

What the regulatory guidance says about foreseeable change and delay

Brokers do not need a new rule to deal with this. The existing guidance already covers it.

Foreseeable changes are part of the best interests assessment. ASIC’s Regulatory Guide 273 lists matters brokers are likely to need to consider. They include “reasonably foreseeable changes to the consumer’s personal circumstances and financial situation” (RG 273.48(d)). RG 273.116 says the duty applies based on the information available at the time, and that this information “includes reasonably foreseeable changes”. A build running past its expected finish date, with rent or other housing costs continuing, is arguably the kind of known, planned or expected event the guidance has in mind. ASIC’s responsible lending guide, RG 209, uses similar wording at RG 209.180.

Outgoings that come with the purchase count. RG 209.200 says a consumer’s capacity can be affected by changes to outgoings that are “a likely consequence of the purchase they are intending to make using credit”. ASIC’s example is car running costs on a car loan. For a construction client, the equivalent costs include paying rent while the build is under way, holding costs, and changes to insurance.

Delay can trigger a fresh look. RG 273.121 says that when the credit assistance process is delayed, brokers “should consider whether you need to start a new assessment or make further inquiries into the consumer’s circumstances”. RG 273.122 lists the factors to weigh: the length of the delay, whether the information is still reasonably current, and your responsible lending obligations. On timing, RG 209.44 says the required inquiries and verification must happen within 90 days, or 120 days for a home loan, before the assessment and before the regulated conduct.

Records carry the proof. RG 273.165 says ASIC generally expects brokers to keep records of relevant conversations with the consumer, and of the options and recommendation given, with reasons.

How these paragraphs apply to a specific construction file depends on the facts and on your licensee’s policies. Treat this as general information and check the approach with your licensee or compliance adviser.

A construction-file stress test for this week

Here is a practical way to review the construction files already in your pipeline:

1. List every open construction file with its contract date, expected completion date, current stage and the date of your last assessment.
2. Check the lender’s construction terms. Look at the maximum construction period, how progress payments are released, what evidence it needs for variations, and what happens if the build runs over. Policies differ, so check each lender’s current policy rather than assuming.
3. Model the delay. Ask the client what three to six extra months of rent and holding costs would do to their budget. The Equifax data suggests many households have little room to spare.
4. Model the variation. Test a cost overrun of 5% and of 10% against the client’s available funds, and record where the extra money would come from.
5. Re-date the assessment where needed. If the file has been waiting, or the client’s circumstances have changed, apply RG 273.121–122 and the RG 209.44 timeframe before taking the next step.
6. Record the conversation. Note what you discussed, what the client decided and why, in line with RG 273.165.

Changing the conversation for new construction enquiries

For clients who have not yet signed a building contract, the numbers support a more structured first meeting:

• Ask about the timeline before the rate. Find out how long the client can carry rent and repayments at the same time, and how they would cope if the build ran several months late.
• Talk about contingency. A client who can only absorb a 1% to 5% overrun may need a different budget, a different build or more time to save, not just a different lender.
• Encourage due diligence on the builder, within your role. Brokers are not builder assessors, and RG 273.79 says ASIC does not expect brokers to advise on matters outside their competence. It is still reasonable to suggest the client checks the builder’s licence, insurance and track record with the appropriate authorities or advisers before signing.
• Explain the pipeline effect. Reardon said “today’s new home sales are tomorrow’s housing commencements.” Falling sales and rising cancellations point to fewer new builds in 2027, which will affect how you plan your own construction pipeline.

The opportunity for construction-literate brokers

Fewer new builds means less construction lending, but the clients who still build will need more help. Brokers who understand progress payments, the practical effect of variations and how each lender handles an overrun can stand out when direct lenders offer a standard process. The same knowledge helps with existing clients. Checking in during a delayed build, before a stage payment is held up, is good service and gives you a clear record of the advice you gave.

There is a commercial reason too. HIA’s figures show new home sales falling in every surveyed state. Brokers who rely on house-and-land referrals from builders should look at where that referral flow is heading, and plan for a smaller pipeline next year.

The bottom line

The 23% figure is self-reported and should not be over-read. But it lines up with Equifax’s evidence of trade businesses leaving the industry and HIA’s evidence of falling sales and rising cancellations. For brokers, the practical risk is that a construction loan approved on one timeline and budget will run on another. The guidance already expects you to consider reasonably foreseeable changes and to reassess when a file has been delayed. Review your open construction files this week, update assessments that are out of date, and record the conversations you have with clients.

Sources: Equifax Australia media release, “Australians Report Just 23% of New Builds Finished on Time…”, 17 September 2026; HIA media release, “New home market cannot absorb more taxes or rate increases”, 15 September 2026; The Adviser, “FHB lodgements recover slightly as investor pre-approvals plunge”, 17 September 2026 (Loan Market data); ASIC RG 273 (June 2020); ASIC RG 209 (December 2019).