Economist takes Albo to task after election win as he points out a major problem with Labor's plan to build 1.2million homes
An economist has warned there's 'no chance' Labor will reach its goal of building 1.2million homes in five years, amid soaring construction costs and unfettered immigration.
Australia has a record level of construction company insolvencies in 2025, a 24 per cent increase over last year's rate.
'We've lost all these builders at the same time as the government wants to build more homes and there just isn't the capacity there,' Leith van Onselen told ABC Radio Brisbane.
'It's just too expensive to build housing in Australia at the moment, for a variety of reasons, and that just means that less housing is going to be built at the same time the government has the throttle on immigration.'
Mr van Onselen, who is chief economist at MacroBusiness who previously worked at the Australian Treasury, said although house prices were still increasing, builders were doing it tough.
'As a result, builders are caught between a rock and a hard place whereby they can't deliver stock at a profitable level, and that has created a major handbrake on housing construction.
'We're still seeing lots of builders going under, and they're struggling to make a profit at the moment, which just means this housing construction target from the federal government is completely unrealistic.'
Mr van Onselen said there was 'absolutely no chance' the Albanese government would reach its housing target within the next five years.
The policy required 240,000 homes to be delivered every single year for five years.
Australia's record year for construction was 2017 when about 223,000 homes were built.
'Our very best year in history was 14 per cent less than the Albanese government's target.
'We just don't have the labour to build these homes, it's too expensive to build these homes, and also land prices are just simply too high.
'When you couple excessively high land costs, with excessively high costs to put the structure on top of that land, it's just simply too expensive to build housing in Australia.'
Apartments weren't the solution either, because they were significantly more expensive than detached houses, he said.
Infrastructure spending was also inadequate as migrants continued to flood into Australia.
Mr van Onselen pointed to an Infrastructure Australia report from 2019 that warned an extra $40billion of investment a year for five years was needed to keep up with population growth.
'If you fast-forward from there to the current time, Australia has added 2.2million people since 2019... That is roughly the equivalent of adding a Perth.
'...If the situation was dire in 2019, as Infrastructure Australia said, and we've added 2.2million people since that time through very high immigration, and we don't have enough workers to build the infrastructure, why are we persisting with this incredibly high immigration program when we just can't build the infrastructure for it?'
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