Australia’s housing market is struggling to keep pace with demand. Latest ABS data shows housing completions fell 1.7% in the December quarter to 43,536 dwellings, leaving the nation 77,500 homes short of the National Housing Accord’s target just 18 months into the five‑year plan, Herald Sun reported.
This comes despite a record $110.5 billion spent on new housing construction in the past year. The Accord aimed for 1.2 million homes over five years, but only 282,500 have commenced so far, well below the 360,000 required.
The shortfall highlights the growing mismatch between housing demand and supply, with affordability pressures mounting across major cities.
The Property Council of Australia warned that approvals alone won’t solve the crisis.
“With no state currently on track to meet its housing target, stronger commencements alone will not close the supply gap if fewer homes are being completed,” executive director Matthew Kandelaars (pictured left) said in a media release.
Kandelaars pointed to post‑permit delays, infrastructure shortfalls, and rising construction costs as key barriers.
“The constraint on housing supply sits after planning approval, with post‑permit processes, lack of housing‑enabling infrastructure, slow coordination with utilities and rising costs all reducing the rate at which approved projects are completed,” he said.
Industry analysts note that these bottlenecks are slowing delivery even as demand remains strong, creating further competition for limited stock.
The Housing Industry Association cautioned that recent gains in commencements were buoyed by earlier rate cuts, but with the Reserve Bank signalling further increases, activity could slow again.
“With interest rates on the way back up, the task of increasing supply will depend on governments reducing the cost of delivering new homes to market in other ways,” senior economist Tom Devitt (pictured right) said in a media release.
HIA has also stressed that lower housing taxes are essential to meeting the Accord’s 1.2 million target, arguing that interest rate settings alone cannot drive supply.
Industry leaders argue that heavy property taxes, particularly in Victoria, are deterring investment. Calls are growing for reforms to negative gearing, capital gains tax, and state surcharges to encourage investors, who currently account for 40% of new builds.
For more insights, read the Herald Sun report on realestate.com.au.
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