Australia has a long way to go to meet the National Housing Accord’s ambitious targets to deliver 1.2 million new, well-located homes by 2029. All indicators point to a substantial shortfall, and the time to pivot is now.
Phil Leahy, CEO of White Picket Fence
We have a once-in-a-generation opportunity to get this right, and falling short simply is not an option. The consequences are too heavy. If the shortage continues, rents and property prices will continue to escalate, pricing out future generations. Home ownership has been steadily in decline for decades, and it’s time to address the imbalance.
Without greater equality in our housing market, we will end up with a social crisis on our hands in years to come.
Data from the Australian Bureau of Statistics (ABS) shows that delivery is already lagging behind. Only around 174,000 new homes commenced construction in the last 12 months, almost 30% short of the 240,000 a year needed to hit the goalpost.
Another sobering statistic is that the data also shows building activity has fallen by 6.6% for new houses and 4.4% for new units.
In fact, new home approvals are trending down. The latest ABS figures reveal just 170,719 homes were approved in 2024, the second-lowest annual figure since 2012.
Industry commentators, including the Property Council of Australia (PCA), predict delivery of new homes will fall short of the 2029 target by almost 500,000. Bold predictions suggest a 40% uplift in activity is needed if we are going to meet the National Housing Accord targets.
The PCA recently foreshadowed that if the National Housing Accord targets aren’t met, a “housing affordability time bomb” will be detonated. Our housing crisis is now at a dangerous turning point.
Unpacking the Housing Shortfall
New housing stock delivery is firmly on the radar of both the government and the property development sector. Dedicated government bodies and new policy tools have been established to increase and fast-track housing delivery.
But despite this, delivery pace remains significantly behind these targets. So where are the pain points, and how do we move past them?
Macroeconomics play a role, with housing affordability and inflation stifling the market. New First Home Buyer incentives have recently come into play and we can expect to see the economic impact of those later this year and into 2026.
Labour shortages and declining productivity in the construction sector have also played a role in creating the bottleneck in supply. The government is looking at skilled migrants to help boost delivery – yet this also adds to our need for more housing.
Lastly, delays in the planning system also add another layer of complexity and cause more lags. New planning tools to increase dwellings in new apartment buildings have resulted in developers going back to the drawing board on many projects – delaying thousands of new homes.
Is Greenfield Development the Secret Weapon?
Greenfield development has a big role to play in meeting the National Housing Accord, as it can deliver at scale.
Large land parcels in metropolitan areas and regional hubs have the capacity to deliver thousands of new homes. Importantly, greenfield sites also unlock affordability and help to level the playing field with diversity in dwelling types. Greenfield sites offer space to build apartments, townhouses and detached housing so they provide an affordable entry point to the market, while also catering to growing families.
Affordability for buyers is driven by lower land acquisition costs for developers, relative to infill sites closer to the city. This is enhanced for first homebuyers when government incentives are factored in, further reducing the price.
Greenfield sites are a compelling alternative for developers, offering scale and less complex pathways for development. Backed by private capital, the greenfield development sector has the capacity to increase significantly and push us closer to the National Housing Accord targets.
Global Lessons: Learning from Canada
Australia isn’t the only country with a housing shortage, and approaches can be modelled on successes from around the world.
Canada is experiencing a housing shortage spurred on by record immigration levels after the COVID-19 pandemic. A rental crisis was created by this population boom, with rental vacancies falling to a record low and rental inflation soaring.
The National Bank of Canada estimates that the nation’s shortage of rental housing exceeds 450,000 units.
One of the tactics introduced by the Canadian Government includes an “immigration freeze” – aiming to stabilise the population at its current level until 2027.
Early indicators show this approach is yielding results and the slower population growth has driven eight consecutive monthly declines in Canadian asking rents, which are tracking 3.3% below a year earlier.
Australia’s approach to the housing crisis needs to embrace a range of government policies beyond new planning pathways, such as slowing immigration rates. We only have one chance to contain this housing crisis – and the time to act is now.
