Summarize this content to 2000 words in 6 paragraphs Decades of falling productivity in housing construction has restricted the supply of new homes and contributed to increasingly unaffordable housing, research from the Productivity Commission has revealed.The damning assessment of the residential construction sector found that over the past 30 years, physical productivity has declined by 53 per cent and labour productivity by 12 per cent. In contrast, labour productivity in the broader economy has increased by 49 per cent over the same period.Perth’s building industry is unable to keep up with demand.Credit: Ross SwanboroughIt comes on top of construction costs increasing by 40 per cent in the past five years while residential build times are up 80 per cent over the last 15 years.Commission chair Danielle Wood said governments were rightly focused on changing planning rules to boost the supply of new homes, but the speed and cost of new builds also mattered.“Lifting the productivity of home building will deliver more homes, regardless of what is happening with the workforce, interest rates or costs,” she said.A complicated and slow approval process, lack of innovation, a fragmented industry dominated by small players (the average residential building firm employs less than two people), and difficulties in attracting and retaining workers are all issues that have dragged on productivity, the report found.Definitions‘Physical productivity’ measures how many homes are built per hour worked. It doesn’t account for the quality of those homes or their size.Fewer homes may be being built per hour worked – but they are substantially bigger and better homes today than 30 years ago. The best measure is the ‘labour productivity’ estimate. This does factor in size and quality, and is based on the value of the homes being built, rather than the number of homes.Master Builders’ Association chief executive Denita Wawn said the report confirmed what builders and the broader industry have long called for. We aren’t going to build the homes we need without a focus on improving productivity.“Productivity is more than an economic buzzword. Every day we drag our heels on tackling the challenges faced in the industry, the longer we drag out the housing crisis,” she said.
