Housing target already behind: Will we hit 1.2m homes?

The September quarter saw the total number of dwelling commencements rise 4.6 per cent to 43,247, according to the latest Australian Bureau of Statistics (ABS) data.

Broken down, new private sector house commencements rose 5.2 per cent to 27,651 dwellings and new private sector other residential commencements rose 3.8 per cent to 14,677 dwellings. Meanwhile, the value of total building work done rose 0.3 per cent to $38.5 billion.

While this may seem like positive progress, according to the government’s own targets, we’re 15,000 homes short. To meet the National Housing Accord’s 2029 target of 1.2 million new homes, 60,000 are needed every quarter.

The Property Council of Australia said that in the first three months since the Housing Accord kicked off on 1 July 2024, only 44,884 homes were built across Australia.

Property Council group executive policy and advocacy, Matthew Kandelaars, said: “Few expected we’d be meeting our welcome and ambitious housing target from day one, but it’s doing its job by providing transparency about who is lagging and by how much.

“If we don’t start as we intend to finish, we’ll be kicking into a gale at the final break – making the job near impossible. There’s no time to waste and we can’t afford to slip any further behind. Our new home target is much more than an arbitrary number. It is what’s needed to close the national housing supply shortage. It represents hard hats, steel caps and getting Australian families into the homes they deserve.”

With a federal election penned for May, Kandelaars said that whoever is in power will need to uphold this target.

“The work of the next term of the Federal parliament needs a laser-focus on helping states and territories do the heavy lifting required to meet our target. It’s evident from today’s data that some states are far better placed than others but all need a serious and immediate kick into action,” said Kandelaars.

“The most urgent priorities are for states and territories to address affordability-killing taxes on new homes, cut red tape to boost productivity and address critical shortages of skilled labour.”

According to HIA, the current trajectory will see 173,000 homes commenced in the first year of the accord. This is 67,000 short of what is necessary to hit the target.

“In the face of decades of a structural undersupply of housing, at the beginning of 2022, the Federal Government decided to play a more prominent role in the housing conundrum. The present Government has set about an active collaboration with all levels of government and industry to boost overall housing supply by committing to delivering 1.2 million new well-located homes over five years (July 2024 to June 2029),” said HIA senior economist Tom Devitt.

“The September quarter result is less than three quarters of the required build rate. This is simply too slow out of the blocks. Higher density housing development is running at its lowest levels in over a decade and has been particularly constrained under the weight of uncertainty in tax settings, skilled labour shortages and regulatory imposts.

“A significant pick-up in multi-unit starts is urgently required to meet the housing demand of recently elevated net overseas migration. This market segment is crucial to making inroads on housing affordability and improving home ownership rates for first home buyers.”

Despite the slow start to the housing accord, Master Builders revealed that commenced construction was still 4.6 per cent higher than in the June quarter of 2024 and 13.9 per cent higher than the September quarter of 2023.

According to Master Builders Australia CEO Denita Wawn, apartments are the path forward to hitting the target.

“Our performance in apartment construction will be the key to whether we meet the target. Apartment construction levels remain too low because the investment appetite is not there. Low productivity, labour shortages, costly and restrictive CFMEU pattern agreements, a lack of supporting infrastructure and a high inflationary environment all contribute to project costs not stacking up,” said Wawn.

“If we are going to solve the housing crisis, we need to build more apartments and make them more attractive for people to invest in – only then will we see a lowering of rental inflation and more homes for Aussies.”

With the government recently announcing the “biggest home building program in Australian history,” NSW at least may see a boost in development. This plan does not include the other states and territories, however.

Related: Government announces ‘biggest home building program in Australian history’

Jack Campbell is the editor of Broker Daily. After graduating from the University of Wollongong in 2022, Jack began his journalistic career working on Broker Daily’s sister brand, HR Leader. In August 2023 he was made the news editor and worked alongside some talented journalists writing articles and recording podcasts.

To reach Jack, email him at: This email address is being protected from spambots. You need JavaScript enabled to view it.