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The head of one of the nation's largest builders says he was offered a billion dollars in housing construction jobs every month last financial year, yet his company's net profit collapsed 86 per cent.
Hutchinson Builders chairman Scott Hutchinson said the glut of demand was paradoxically causing profits to fall and costs to rise.
"It's counterintuitive, but as our turnover goes up our profit goes down," Mr Hutchinson said.
"If you're a little formwork company and you have four good crews and you win eight jobs, you've got to spread your good crews over eight jobs and you're much less efficient.
"A team gets good when they work together for a long time, and then all of a sudden in a boom they have to get spread out so there are inefficiencies caused by a boom."
Mr Hutchinson said two years ago he took on a large number of fixed-price jobs, only for costs to increase 30 to 40 per cent due to efficiency losses and rising material costs.
The chairman said he turned away around 80 per cent of jobs last year due to the pressures.
He said attempts to blame the unions were a "red herring" since, in his view, the real problem lay in the surplus demand and the shortage of workers.
Last year's annual report shows, despite the company's steep decline in profits, revenues actually increased 17 per cent from the previous financial year.
Brisbane developer Don O'Rorke said Australia either needed to import skilled immigrants or drastically increase its trainee cohort to fix the labour shortages.
The Consolidated Properties Group chairman said without government subsidies his business could not produce a two-bedroom apartment for less than a million dollars.
"The construction costs are so high that that's forced the sale price up to a million dollars," he said.
"That million dollars was $450,000 four years ago — that's how much the prices have increased."
Mr O'Rorke said the only thing his business would be able to do without government subsidy was "premium apartments in premium locations for wealthy people".
"Seventy per cent of our buyers have come from the western suburbs, they're owner-occupiers, they're downsizers, and they're baby boomers," he said.
Queensland Premier Steven Miles told ABC Radio Brisbane the government had ruled out stamp duty cuts as a way to ease house prices.
Mr Miles said the first home owner grant was the better way to ease housing costs without pushing prices up even higher.
"The advice we had was that a more effective way to increase supply was to provide a first home owner grant to people buying a new home," he said.
"By limiting it to new homes the price in the market should be affected less while incentivising builders to build new homes."
Mr Hutchinson said several high-rise projects in Brisbane had stalled indefinitely because they were no longer feasible at current prices.
He said many builders were waiting for the boom to subside or costs to fall before resuming those projects.
He said there was no way of telling when that would be.
Mr Hutchinson said he was fearful for the future of Australia's building sector.
"A lot have collapsed and there's more to come," he said.
"There's pressure on, we're seeing it every day, and the subcontractors are going broke too."
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