The Housing Industry Association (HIA) has raised concerns that the rapid rollout of data centres across Australia could come at the expense of new housing supply, as both compete for scarce land, energy, water, and infrastructure capacity.
HIA Chief Executive Industry and Policy Simon Croft said fast-track planning mechanisms are allowing data centre projects to move through approvals well ahead of housing developments.
"Under fast-track planning mechanisms, it is entirely conceivable that a data centre spanning many hectares could be approved faster than a single home," Croft said in a media release, adding that growth corridors and regional hubs are already experiencing housing delays tied to infrastructure constraints.
Croft's comments come as Australia continues to grapple with a shortfall against the National Housing Accord's 1.2-million-home target, with building approvals recently falling for a second straight month.
Croft said the country needs both forms of infrastructure, but warned governments cannot afford to deprioritise housing while chasing digital investment.
"Australia needs both homes and digital infrastructure but the rapid expansion of new data centres should not come at the expense of boosting supply of new housing," Croft said.
Croft pointed to specific cases where this competition is already playing out: "There are examples in states such as Victoria and New South Wales, where land previously earmarked for housing is being fast-tracked for data centre development."
HIA also flagged the scale of resources consumed by data centres compared to households, noting "a single large-scale data centre can consume resources equivalent to tens of thousands of homes."
The association is pushing for stronger federal and National Cabinet commitments to ensure data centre operators, rather than households, bear the cost of managing that consumption.
That resource competition may already be feeding into construction costs more broadly. Westpac Chief Economist Luci Ellis noted in a research note that rapid infrastructure build-outs — as seen previously during the mining boom and in recent eastern seaboard infrastructure cycles — tend to push up construction costs as demand for builders, materials, and resources outstrips supply in the short term.
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