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Protecting margins in a changing market
This high-demand environment is competing against aggressive economic headwinds, supply shocks and growing uncertainty. A progression of cash rate hikes has significantly increased the cost of capital, while consumer sentiment has plummeted to near-record lows. This slump, exacerbated by a global energy shock and persistent inflation, has created a volatile environment for long-term investment and project feasibility.
Simultaneously, an acute shortfall of skilled professionals, evolving funding models, and tougher regulations are driving up compliance and delivery costs. When coupled with volatile supply chains and rising input prices, these factors are placing sustained pressure on project returns across the sector.
For many organisations, the struggle to offset these escalating expenses within existing contract structures has transformed a period of record project pipelines into one of heightened solvency risk.
In this environment, protecting value requires more than cost control. It demands an integrated approach across strategy, delivery, funding and risk. Grant Thornton supports clients across the full asset lifecycle, from acquisition and development through to delivery, operation and exit, bringing together audit, tax, risk and advisory capabilities to deliver practical, commercially focused outcomes.
Whether your ambition is to drive efficiency through digital transformation, rethink resource allocation, or navigate fast-changing regulatory requirements, our specialists provide the governance, financial insight and execution support needed to safeguard profitability and strengthen resilience.
In a market defined by complexity and constraint, success depends on disciplined execution, strong governance and the ability to adapt quickly and deliver sustainable outcomes.
Delays in receiving materials and price volatility continue to strain project delivery and profitability. High-performing firms are responding by identifying process inefficiencies and strengthening commercial discipline across the project lifecycle.
The sector is embracing digitisation to streamline operating models and navigate labour shortages. This presents an opportunity to address operational bottlenecks and enable more efficient, data-driven decision-making.
Rising costs and regulatory challenges have increased the focus on financial resilience. Strengthening governance and risk controls provides a practical way to protect the bottom line and maintain delivery certainty.
Higher interest rates and tighter lending conditions are reshaping how projects are funded. Developers are increasingly turning to joint ventures, institutional capital and alternative financing structures, requiring more sophisticated commercial and risk management approaches.
Explore tax strategies to manage labour, fuel, import and cash flow pressures in construction.
The NSW Budget 2026 focuses on health and education spending, with slower growth forecasts, rising debt and targeted foreign investor duty relief measures.
On Tuesday 23 June 2026, Treasurer David Janetzki handed down his second state budget alongside Premier David Crisafulli. Deficits are forecast throughout the forward estimates, with a surplus of $619m projected for 2029-30.
The sector is subject to extensive legislation and regulation at the federal level (including Australian Taxation Office (ATO), Foreign Investment Review Board (FIRB), and Australian Securities and Investments Commission (ASIC) reporting requirements), along with multiple layers of state and territory regulation. Staying current across these requirements is essential for firms operating in multiple jurisdictions, as failure to meet obligations can lead to license suspensions and penalties.
Firms can cut through complexity and reduce the hidden costs of regulatory friction and protect their margins by focusing on best-practice tax, audit and risk management, supported by strong governance frameworks and consistent processes.
Australia continues to face a housing crisis. Rapid growth in house values has deepened housing inequality, a trend likely to remain a significant challenge for the foreseeable future.
To address this, developers and not-for-profits are increasing social housing supply, introducing ‘help-to-buy’ schemes and investing in build-to-rent projects. While federal initiatives like the Housing Australia Future Fund, Local Infrastructure Fund and Social Housing Accelerator provide a pipeline, the real opportunity lies in mastering the complexity of new commercial models. Success requires a focus on streamlining operating models to manage diverse funding requirements while preserving returns in a high-interest-rate environment.
Compounded by supply chain disruption, material shortages and high freight costs, price increases have heavily impacted an industry already operating on tight margins. These conditions have eroded profitability and created solvency challenges for organisations that do not respond early.
To address these pressures, high-performing firms are strengthening commercial discipline, improving cost visibility and identifying process inefficiencies across the project lifecycle. Others with stronger balance sheets are diversifying revenue streams or vertically integrating to better manage risk.
From virtual property tours to predictive AI in project management, digital advancements enable greater precision – optimising time and resource allocation while reducing manual processes that create inefficiencies.
The opportunity lies in adopting technology that enhances the operating model, rather than simply automating existing tasks. Agile firms are increasingly using AI to improve forecasting, project delivery and decision-making. The cost barrier to modernisation can be mitigated with available grants and incentives, that will help your business remain competitive as digital challengers (PropTech and ConTech) emerge.
Recent high-profile incidents including the ransomware attacks on Metricon Homes and Champion Homes have elevated data protection to a board-level priority. The volume of sensitive data held across the sector makes it a prime target for breaches that can result in financial loss, reputational damage and reduced shareholder confidence.
The regulatory landscape is tightening in response, with increased reporting obligations and oversight. The Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) 'Tranche 2' reforms require real estate agents and developers to implement rigorous customer due diligence and suspicious matter reporting. Additionally, the Cyber Security Act 2024 mandates that businesses with a turnover of $3 million or more report ransomware payments within 72 hours. Strengthening governance and implementing robust risk controls provides a practical way to prevent fraud while protecting margins from the heavy financial and reputational penalties of a security failure.
Technology is creating demand for a more tech enabled workforce, while a shortage of skilled tradespeople persists. As traditional financial incentives become less effective, firms are adopting non-cash benefits and employee share schemes to attract and retain talent, while also protecting intellectual property.
Forward-looking organisations are making more strategic in-house, outsourcing and offshoring decisions – identifying which capabilities should remain core and where external support can improve efficiency while maintaining project momentum.
Alongside this, investing in continuous learning and digital recruitment is becoming critical to maintaining competitiveness.
The Brisbane 2032 Olympic and Paralympic Games has entered a critical delivery phase, acting as a catalyst for significant development across South East Queensland. More broadly, national infrastructure pipelines are placing sustained pressure on sector capacity.
These projects demand strong commercial discipline to manage the rising costs of materials and specialised labour. The challenge for businesses is to deliver on high-value contracts while maintaining control over cost, quality and timelines in an increasingly complex risk environment.
Providing assurance across complex projects, joint ventures and funding structures, while strengthening governance, reporting and internal controls in a high-risk delivery environment.
Helping you respond to evolving regulatory requirements and stakeholder expectations, while embedding sustainability into strategy, operations and reporting.
Identifying and implementing restructuring initiatives that improve financial performance, enhance cash flow and support long-term viability.
Supporting businesses facing financial pressure to assess turnaround options, stabilise operations and preserve value for stakeholders.
Supporting capital structuring, M&A and refinancing activities, helping you access capital, strengthen investor relationships and deliver commercially sustainable projects.
Advising across the business lifecycle and key transactions to help you manage obligations, optimise structuring and navigate an increasingly complex regulatory environment.
Providing assurance across complex projects, joint ventures and funding structures, while strengthening governance, reporting and internal controls in a high-risk delivery environment.
Supporting businesses facing financial pressure to assess turnaround options, stabilise operations and preserve value for stakeholders.
Helping you respond to evolving regulatory requirements and stakeholder expectations, while embedding sustainability into strategy, operations and reporting.
Supporting capital structuring, M&A and refinancing activities, helping you access capital, strengthen investor relationships and deliver commercially sustainable projects.
Identifying and implementing restructuring initiatives that improve financial performance, enhance cash flow and support long-term viability.
Advising across the business lifecycle and key transactions to help you manage obligations, optimise structuring and navigate an increasingly complex regulatory environment.
From rising costs and regulatory change to housing demand and infrastructure growth, we help real estate and construction businesses turn complexity into competitive advantage.
Connect with one of our Real Estate & Construction industry specialists today.
Partner and National Head of Real Estate & Construction
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