Housing target continues to fall short

Over the month of December, total dwelling approvals rose 0.7 per cent to 15,174. Meanwhile, private sector houses fell 3 per cent to 8,715.

Daniel Rossi, Australia Bureau of Statistics (ABS) head of construction statistics, said: “In original terms, a total of 171,394 dwellings were approved across the 2024 calendar year. This was 4.7 per cent higher than the 163,722 dwellings approved in 2023.”

Despite this increase, organisations aren’t happy with the progress being made. The government’s target of 1.2 million new homes by 2029 is off to a shaky start and, according to HIA, approvals are “nowhere near” target.

“Residential building approvals in 2024 increased from the decade low seen in 2023 but were nowhere near the levels needed to meet underlying demand for housing,” said HIA economist Maurice Tapang.

“The second quarter of the National Housing Accord saw just 45,850 dwellings approved for construction. Australia needs to build 60,000 new homes each quarter to reach the 1.2 million target.”

Tapang said that owner-occupiers and investors are slowly returning to the market, but it is still extremely challenging amid high costs in borrowing, land, and building.

To help propel progress to the 1.2 million target, Tapang said that the barriers hindering supply need to be addressed.

“In order to build more homes, meet underlying demand and addressing the housing crisis, governments should help remove the barriers to increasing housing supply,” he said.

“This includes helping lower the cost of delivering shovel-ready land to market, reducing the tax imposts on new homes and investors and addressing constraints with labour supply.”

Master Builders Australia also weighed in on the ABS data, recognising a persisting shortfall.

“In 2024, higher density approvals dropped back by 1.3 per cent, meaning 2024 was the worst year for higher density approvals since 2011. The insufficient flow of new home building on the higher density side of the market is one of the main sources of rental price inflation,” said Shane Garrett, chief economist at Master Builders Australia.

Denita Wawn, CEO of Master Builders Australia, said further: “Australia desperately needs to boost housing supply, and this will only be achieved when the cost of new home building starts to moderate, and project costs stack up.

“It’s more than just a number – the lack of housing supply is leading to rising rents, homelessness, and higher mortgages, which impacts the well-being of individuals, families, and communities. This Federal Election, all parties must be clear on how they will help build more homes for Aussies.”

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

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.

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