Industry pressures mount as housing shortfall widens
Australia is significantly behind schedule on its national housing goal, with new data analysis pointing to a growing gap between building activity and the federal target of 1.2 million new homes by mid-2029.
Figures released in January revealed that, just three months into the initiative, the country was already more than 15,000 homes short. Subsequent figures showed only 171,394 building approvals were recorded in 2024 — well below the 240,000 annual approvals needed to stay on course.
To recover lost ground, experts now estimate that 276,994 new homes would need approval each year over the next four years.
Several headwinds continue to challenge the construction sector, including inflationary pressures, workforce shortages, weaker borrowing capacity, inadequate infrastructure and a burdensome tax environment. These factors have made the goal increasingly difficult to reach.
Housing completion figures for the first two quarters of 2024 underline the shortfall. Fewer than 45,000 homes were finalised between July and September last year, with just over 45,000 completed in the following quarter — both around 15,000 short of expectations. While third quarter data is still pending, only 41,669 homes were started in the final quarter of 2024, suggesting the pace is slowing.
At the current rate, completions are projected to reach approximately 180,000 per year — placing the country as much as 300,000 homes behind the target by 2029.
However, industry observers warn that the actual shortfall may be significantly worse. The number of approvals in 2024 was the second lowest in more than a decade. A March report from Mandala Partners, commissioned by the Property Council of Australia, forecast a potential gap of 462,000 homes by the end of the period.
“[The government has] no chance of hitting the target – and they made their own bed,” said SQM Research director Louis Christopher.
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