The 262,000-home shortage Australia needs to fix
Lower interest rates and stable costs are improving affordability and lifting supply but Australia is on track to fall 262,000 homes short of its five-year target, the National Housing Supply and Affordability Council says in its State of the Housing System 2025 report.
The 938,000 homes the country is forecast to build over the period to June 2029 is up from a forecast 903,000 new homes the federal government's advisory council made two years ago and reflects cyclical improvements in the economy, council chair Susan Lloyd-Hurwitz said. But the revised forecast total still falls short by 262,000 of the 1.2 million new homes the federal government has pledged to deliver the next five years.
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The Age
2 days ago
- The Age
‘Too hard to build': Albanese government slams local councils over housing shortfall
The Albanese government has taken aim at local councils and top-heavy universities as being responsible for the nation's housing crisis and a drain on Australians' stagnating standard of living respectively, even as Labor struggles to meet its home-building targets. In one of his first speeches since being appointed assistant minister for productivity, Andrew Leigh will argue on Tuesday that a 'thicket of regulation' is holding back housing, infrastructure and research. Leigh's speech at the Chifley Research Centre in Melbourne comes just weeks after the government's own independent housing sector adviser, the National Housing Supply and Affordability Council, warned that the Labor government's National Housing Accord was set to fall 262,000 short of its 1.2 million target for new homes by the end of the decade. Leigh will put the heat on local government, singling out North Sydney Council, which has been scrambling to repair its budget after the pricing regulator rejected a proposed 87 per cent rate rise, as a prime example of a slow-mover. 'After an applicant files an application for development approval, councils are supposed to do the initial checks and lodge it in their system within 14 days,' he will say. 'In the current financial year, just one in three development applications to North Sydney Council have been approved in that time. The average lag is 41 days.' North Sydney Council was contacted for comment. Leigh will note the council also has a low approval rate, approving just 44 new homes in the seven months to February this year, 'barely 6 per cent of its pro rata target of 787 homes under the National Housing Accord.' The accord has linked funding to a target – agreed to by federal, state and local governments as well as institutional investors and the construction sector – of building 1 million well-located homes over five years from mid-2024. Treasurer Jim Chalmers, following Labor's thumping election victory, marked a turning point in the government's priorities, telling the ABC's Insiders program in May that Labor's 'first term was primarily inflation without forgetting productivity. The second term will be primarily productivity without forgetting inflation.'
Sydney Morning Herald
2 days ago
- Sydney Morning Herald
‘Too hard to build': Albanese government slams local councils over housing shortfall
The Albanese government has taken aim at local councils and top-heavy universities as being responsible for the nation's housing crisis and a drain on Australians' stagnating standard of living respectively, even as Labor struggles to meet its home-building targets. In one of his first speeches since being appointed assistant minister for productivity, Andrew Leigh will argue on Tuesday that a 'thicket of regulation' is holding back housing, infrastructure and research. Leigh's speech at the Chifley Research Centre in Melbourne comes just weeks after the government's own independent housing sector adviser, the National Housing Supply and Affordability Council, warned that the Labor government's National Housing Accord was set to fall 262,000 short of its 1.2 million target for new homes by the end of the decade. Leigh will put the heat on local government, singling out North Sydney Council, which has been scrambling to repair its budget after the pricing regulator rejected a proposed 87 per cent rate rise, as a prime example of a slow-mover. 'After an applicant files an application for development approval, councils are supposed to do the initial checks and lodge it in their system within 14 days,' he will say. 'In the current financial year, just one in three development applications to North Sydney Council have been approved in that time. The average lag is 41 days.' North Sydney Council was contacted for comment. Leigh will note the council also has a low approval rate, approving just 44 new homes in the seven months to February this year, 'barely 6 per cent of its pro rata target of 787 homes under the National Housing Accord.' The accord has linked funding to a target – agreed to by federal, state and local governments as well as institutional investors and the construction sector – of building 1 million well-located homes over five years from mid-2024. Treasurer Jim Chalmers, following Labor's thumping election victory, marked a turning point in the government's priorities, telling the ABC's Insiders program in May that Labor's 'first term was primarily inflation without forgetting productivity. The second term will be primarily productivity without forgetting inflation.'
The Advertiser
23-05-2025
- The Advertiser
Australia's plan to build more homes is in deep trouble. We need bold action
Australia's plan to build 1.2 million new homes by 2029 is in trouble. A new report by the National Housing Supply and Affordability Council (NHSAC) shows we are likely to miss this ambitious target by a huge margin. At the current pace, the council forecasts we will fall about 262,000 homes short of the goal. In other words, for every five homes we need, we're only on track to build about four. No state or territory is building enough to meet its share. This is more than just a number; it means the housing affordability crisis will continue unless we act fast. The report lays out five areas of priority for reform. But implementing its recommendations will require bolder action than we're currently seeing. NHSAC's State of the Housing System 2025 report shows very challenging conditions for future home buyers and renters. By the end of 2024, it took half of median household income to service a new mortgage. Think about that: half of your income gets spent on maintaining a roof over your head. That's well above one common measure of "housing stress" for lower-income households: spending more than 30 per cent of gross income on housing. Anyone planning to purchase their first home faces an average savings period that extends beyond ten years just for their deposit. For renters, the report found it now takes 33 per cent of median household income to cover the cost of a new lease. It doesn't help that rental vacancy rates are near record lows, around 1.8 per cent nationwide. This means renters are competing fiercely for very few available homes. This drives rents even higher. Australians can see the daily reality this report describes. And it can have disproportionate negative impacts on vulnerable groups in society. For example, the rate of homelessness among First Nations people has been about 8.8 times the rate for non-Indigenous Australians. Supply remains a key factor underpinning Australia's housing crisis. We simply aren't building enough homes. Australia completed approximately 177,000 new dwellings in 2024 but that fell short of demand for about 223,000 new homes. And the report predicts we will remain behind our targets for coming years. Under current policy settings, a forecast total of 938,000 new homes will be built between mid-2024 and mid-2029, well short of the Housing Accord's 1.2 million home target. The report identifies five essential action areas needed to restore Australia's housing system to proper functioning. 1. Lift social and affordable housing to 6 per cent of all homes In 2021, only about 4 per cent of dwellings were for social or affordable housing. Governments and not-for-profits must add many more low-rent homes so people on modest incomes aren't trapped on long waitlists. 2. Improve productivity and build faster with modern methods of construction Prefabricated panels, modular kits and even 3D printed structures can halve building time and use fewer tradies. Federal and state governments could fund factories, training and pilot projects to get these methods into the mainstream. The report also calls on the government to address labour and skills shortages. 3. Fix planning systems and unlock land Quicker approvals, firm deadlines and updated zoning would let builders put taller or denser housing near transport, jobs and schools. Governments also need to bundle and service big sites so work can start without years of red tape. 4. Support for renters The report calls on governments to support better outcomes for renters, and to fully implement National Cabinet's "Better Deal for Renters" agreement. This includes through fair notice requirements, no-fault eviction limits and longer leases. It also calls for more support for institutional investment. Tax settings that attract super funds and insurers into large build-to-rent projects would add professionally managed apartments and steady rents. 5. Swap stamp duty for land tax Paying a small yearly land charge instead of a huge upfront stamp duty lets people move or downsize with less of a financial hit, freeing under-used homes and smoothing the market. The council's proposed solutions seem excellent when studied theoretically, but their practical application will prove challenging. Australia needs significant time and effort to address multiple systemic obstacles. One big challenge is the construction workforce. The current workforce lacks enough skilled tradespeople to build homes at the necessary speed. This can result in major delays - even when funding exists. Another barrier is the planning system itself. Changing planning and zoning regulations faces significant political challenges. Higher-density developments face community resistance because of the "not in my backyard" (NIMBY) problem while councils tend to move slowly in updating their regulations. However, the report notes signs of progress in some states. The NSW government has accelerated approval processes and also emphasises "transit-oriented development" - putting new homes near planned and existing transport infrastructure. Similarly, moving to land tax is easier said than done: State governments generate revenue from stamp duty and a shift to an alternative system would require many years to implement. The absence of federal backing and state incentive payments risks delaying this reform. NHSAC's report doesn't just diagnose the problem, it offers a roadmap to a healthier housing system. But those recommendations require bold action. Prime Minister Anthony Albanese's government has a crucial opportunity to turn words into deeds. Australia's housing woes didn't appear overnight, they are the result of decades of under-supply and policy missteps. Turning things around won't be instant - but it is achievable with sustained effort. Australia's plan to build 1.2 million new homes by 2029 is in trouble. A new report by the National Housing Supply and Affordability Council (NHSAC) shows we are likely to miss this ambitious target by a huge margin. At the current pace, the council forecasts we will fall about 262,000 homes short of the goal. In other words, for every five homes we need, we're only on track to build about four. No state or territory is building enough to meet its share. This is more than just a number; it means the housing affordability crisis will continue unless we act fast. The report lays out five areas of priority for reform. But implementing its recommendations will require bolder action than we're currently seeing. NHSAC's State of the Housing System 2025 report shows very challenging conditions for future home buyers and renters. By the end of 2024, it took half of median household income to service a new mortgage. Think about that: half of your income gets spent on maintaining a roof over your head. That's well above one common measure of "housing stress" for lower-income households: spending more than 30 per cent of gross income on housing. Anyone planning to purchase their first home faces an average savings period that extends beyond ten years just for their deposit. For renters, the report found it now takes 33 per cent of median household income to cover the cost of a new lease. It doesn't help that rental vacancy rates are near record lows, around 1.8 per cent nationwide. This means renters are competing fiercely for very few available homes. This drives rents even higher. Australians can see the daily reality this report describes. And it can have disproportionate negative impacts on vulnerable groups in society. For example, the rate of homelessness among First Nations people has been about 8.8 times the rate for non-Indigenous Australians. Supply remains a key factor underpinning Australia's housing crisis. We simply aren't building enough homes. Australia completed approximately 177,000 new dwellings in 2024 but that fell short of demand for about 223,000 new homes. And the report predicts we will remain behind our targets for coming years. Under current policy settings, a forecast total of 938,000 new homes will be built between mid-2024 and mid-2029, well short of the Housing Accord's 1.2 million home target. The report identifies five essential action areas needed to restore Australia's housing system to proper functioning. 1. Lift social and affordable housing to 6 per cent of all homes In 2021, only about 4 per cent of dwellings were for social or affordable housing. Governments and not-for-profits must add many more low-rent homes so people on modest incomes aren't trapped on long waitlists. 2. Improve productivity and build faster with modern methods of construction Prefabricated panels, modular kits and even 3D printed structures can halve building time and use fewer tradies. Federal and state governments could fund factories, training and pilot projects to get these methods into the mainstream. The report also calls on the government to address labour and skills shortages. 3. Fix planning systems and unlock land Quicker approvals, firm deadlines and updated zoning would let builders put taller or denser housing near transport, jobs and schools. Governments also need to bundle and service big sites so work can start without years of red tape. 4. Support for renters The report calls on governments to support better outcomes for renters, and to fully implement National Cabinet's "Better Deal for Renters" agreement. This includes through fair notice requirements, no-fault eviction limits and longer leases. It also calls for more support for institutional investment. Tax settings that attract super funds and insurers into large build-to-rent projects would add professionally managed apartments and steady rents. 5. Swap stamp duty for land tax Paying a small yearly land charge instead of a huge upfront stamp duty lets people move or downsize with less of a financial hit, freeing under-used homes and smoothing the market. The council's proposed solutions seem excellent when studied theoretically, but their practical application will prove challenging. Australia needs significant time and effort to address multiple systemic obstacles. One big challenge is the construction workforce. The current workforce lacks enough skilled tradespeople to build homes at the necessary speed. This can result in major delays - even when funding exists. Another barrier is the planning system itself. Changing planning and zoning regulations faces significant political challenges. Higher-density developments face community resistance because of the "not in my backyard" (NIMBY) problem while councils tend to move slowly in updating their regulations. However, the report notes signs of progress in some states. The NSW government has accelerated approval processes and also emphasises "transit-oriented development" - putting new homes near planned and existing transport infrastructure. Similarly, moving to land tax is easier said than done: State governments generate revenue from stamp duty and a shift to an alternative system would require many years to implement. The absence of federal backing and state incentive payments risks delaying this reform. NHSAC's report doesn't just diagnose the problem, it offers a roadmap to a healthier housing system. But those recommendations require bold action. Prime Minister Anthony Albanese's government has a crucial opportunity to turn words into deeds. Australia's housing woes didn't appear overnight, they are the result of decades of under-supply and policy missteps. Turning things around won't be instant - but it is achievable with sustained effort. Australia's plan to build 1.2 million new homes by 2029 is in trouble. A new report by the National Housing Supply and Affordability Council (NHSAC) shows we are likely to miss this ambitious target by a huge margin. At the current pace, the council forecasts we will fall about 262,000 homes short of the goal. In other words, for every five homes we need, we're only on track to build about four. No state or territory is building enough to meet its share. This is more than just a number; it means the housing affordability crisis will continue unless we act fast. The report lays out five areas of priority for reform. But implementing its recommendations will require bolder action than we're currently seeing. NHSAC's State of the Housing System 2025 report shows very challenging conditions for future home buyers and renters. By the end of 2024, it took half of median household income to service a new mortgage. Think about that: half of your income gets spent on maintaining a roof over your head. That's well above one common measure of "housing stress" for lower-income households: spending more than 30 per cent of gross income on housing. Anyone planning to purchase their first home faces an average savings period that extends beyond ten years just for their deposit. For renters, the report found it now takes 33 per cent of median household income to cover the cost of a new lease. It doesn't help that rental vacancy rates are near record lows, around 1.8 per cent nationwide. This means renters are competing fiercely for very few available homes. This drives rents even higher. Australians can see the daily reality this report describes. And it can have disproportionate negative impacts on vulnerable groups in society. For example, the rate of homelessness among First Nations people has been about 8.8 times the rate for non-Indigenous Australians. Supply remains a key factor underpinning Australia's housing crisis. We simply aren't building enough homes. Australia completed approximately 177,000 new dwellings in 2024 but that fell short of demand for about 223,000 new homes. And the report predicts we will remain behind our targets for coming years. Under current policy settings, a forecast total of 938,000 new homes will be built between mid-2024 and mid-2029, well short of the Housing Accord's 1.2 million home target. The report identifies five essential action areas needed to restore Australia's housing system to proper functioning. 1. Lift social and affordable housing to 6 per cent of all homes In 2021, only about 4 per cent of dwellings were for social or affordable housing. Governments and not-for-profits must add many more low-rent homes so people on modest incomes aren't trapped on long waitlists. 2. Improve productivity and build faster with modern methods of construction Prefabricated panels, modular kits and even 3D printed structures can halve building time and use fewer tradies. Federal and state governments could fund factories, training and pilot projects to get these methods into the mainstream. The report also calls on the government to address labour and skills shortages. 3. Fix planning systems and unlock land Quicker approvals, firm deadlines and updated zoning would let builders put taller or denser housing near transport, jobs and schools. Governments also need to bundle and service big sites so work can start without years of red tape. 4. Support for renters The report calls on governments to support better outcomes for renters, and to fully implement National Cabinet's "Better Deal for Renters" agreement. This includes through fair notice requirements, no-fault eviction limits and longer leases. It also calls for more support for institutional investment. Tax settings that attract super funds and insurers into large build-to-rent projects would add professionally managed apartments and steady rents. 5. Swap stamp duty for land tax Paying a small yearly land charge instead of a huge upfront stamp duty lets people move or downsize with less of a financial hit, freeing under-used homes and smoothing the market. The council's proposed solutions seem excellent when studied theoretically, but their practical application will prove challenging. Australia needs significant time and effort to address multiple systemic obstacles. One big challenge is the construction workforce. The current workforce lacks enough skilled tradespeople to build homes at the necessary speed. This can result in major delays - even when funding exists. Another barrier is the planning system itself. Changing planning and zoning regulations faces significant political challenges. Higher-density developments face community resistance because of the "not in my backyard" (NIMBY) problem while councils tend to move slowly in updating their regulations. However, the report notes signs of progress in some states. The NSW government has accelerated approval processes and also emphasises "transit-oriented development" - putting new homes near planned and existing transport infrastructure. Similarly, moving to land tax is easier said than done: State governments generate revenue from stamp duty and a shift to an alternative system would require many years to implement. The absence of federal backing and state incentive payments risks delaying this reform. NHSAC's report doesn't just diagnose the problem, it offers a roadmap to a healthier housing system. But those recommendations require bold action. Prime Minister Anthony Albanese's government has a crucial opportunity to turn words into deeds. Australia's housing woes didn't appear overnight, they are the result of decades of under-supply and policy missteps. Turning things around won't be instant - but it is achievable with sustained effort. Australia's plan to build 1.2 million new homes by 2029 is in trouble. A new report by the National Housing Supply and Affordability Council (NHSAC) shows we are likely to miss this ambitious target by a huge margin. At the current pace, the council forecasts we will fall about 262,000 homes short of the goal. In other words, for every five homes we need, we're only on track to build about four. No state or territory is building enough to meet its share. This is more than just a number; it means the housing affordability crisis will continue unless we act fast. The report lays out five areas of priority for reform. But implementing its recommendations will require bolder action than we're currently seeing. NHSAC's State of the Housing System 2025 report shows very challenging conditions for future home buyers and renters. By the end of 2024, it took half of median household income to service a new mortgage. Think about that: half of your income gets spent on maintaining a roof over your head. That's well above one common measure of "housing stress" for lower-income households: spending more than 30 per cent of gross income on housing. Anyone planning to purchase their first home faces an average savings period that extends beyond ten years just for their deposit. For renters, the report found it now takes 33 per cent of median household income to cover the cost of a new lease. It doesn't help that rental vacancy rates are near record lows, around 1.8 per cent nationwide. This means renters are competing fiercely for very few available homes. This drives rents even higher. Australians can see the daily reality this report describes. And it can have disproportionate negative impacts on vulnerable groups in society. For example, the rate of homelessness among First Nations people has been about 8.8 times the rate for non-Indigenous Australians. Supply remains a key factor underpinning Australia's housing crisis. We simply aren't building enough homes. Australia completed approximately 177,000 new dwellings in 2024 but that fell short of demand for about 223,000 new homes. And the report predicts we will remain behind our targets for coming years. Under current policy settings, a forecast total of 938,000 new homes will be built between mid-2024 and mid-2029, well short of the Housing Accord's 1.2 million home target. The report identifies five essential action areas needed to restore Australia's housing system to proper functioning. 1. Lift social and affordable housing to 6 per cent of all homes In 2021, only about 4 per cent of dwellings were for social or affordable housing. Governments and not-for-profits must add many more low-rent homes so people on modest incomes aren't trapped on long waitlists. 2. Improve productivity and build faster with modern methods of construction Prefabricated panels, modular kits and even 3D printed structures can halve building time and use fewer tradies. Federal and state governments could fund factories, training and pilot projects to get these methods into the mainstream. The report also calls on the government to address labour and skills shortages. 3. Fix planning systems and unlock land Quicker approvals, firm deadlines and updated zoning would let builders put taller or denser housing near transport, jobs and schools. Governments also need to bundle and service big sites so work can start without years of red tape. 4. Support for renters The report calls on governments to support better outcomes for renters, and to fully implement National Cabinet's "Better Deal for Renters" agreement. This includes through fair notice requirements, no-fault eviction limits and longer leases. It also calls for more support for institutional investment. Tax settings that attract super funds and insurers into large build-to-rent projects would add professionally managed apartments and steady rents. 5. Swap stamp duty for land tax Paying a small yearly land charge instead of a huge upfront stamp duty lets people move or downsize with less of a financial hit, freeing under-used homes and smoothing the market. The council's proposed solutions seem excellent when studied theoretically, but their practical application will prove challenging. Australia needs significant time and effort to address multiple systemic obstacles. One big challenge is the construction workforce. The current workforce lacks enough skilled tradespeople to build homes at the necessary speed. This can result in major delays - even when funding exists. Another barrier is the planning system itself. Changing planning and zoning regulations faces significant political challenges. Higher-density developments face community resistance because of the "not in my backyard" (NIMBY) problem while councils tend to move slowly in updating their regulations. However, the report notes signs of progress in some states. The NSW government has accelerated approval processes and also emphasises "transit-oriented development" - putting new homes near planned and existing transport infrastructure. Similarly, moving to land tax is easier said than done: State governments generate revenue from stamp duty and a shift to an alternative system would require many years to implement. The absence of federal backing and state incentive payments risks delaying this reform. NHSAC's report doesn't just diagnose the problem, it offers a roadmap to a healthier housing system. But those recommendations require bold action. Prime Minister Anthony Albanese's government has a crucial opportunity to turn words into deeds. Australia's housing woes didn't appear overnight, they are the result of decades of under-supply and policy missteps. Turning things around won't be instant - but it is achievable with sustained effort.
