Supply gap to deliver six-figure hit to Australian home buyers
Australia is on track to fall hundreds of thousands of homes short of its national housing construction target, with a new report suggesting this shortfall will drive substantial dwelling price increases across major cities over the rest of the decade.
The Australian Property Market Outlook 2026–2030, released by independent buyer’s agency Propertybuyer, estimates the country could undershoot its National Housing Accord target by up to 462,000 homes. The Accord, led by the federal government, aims to deliver 1.2 million new homes by mid-2029 to ease affordability pressures through greater supply.
Latest Australian Bureau of Statistics figures show that, more than a year into the Accord’s timeframe, building approvals remain well below what is required, with about 193,000 approvals recorded in the most recent 12‑month period.
Using data from the ABS, the Reserve Bank of Australia, the Housing Industry Association and PropTrack, the report projects that a persistent construction shortfall over the next five years will contribute to dwelling price gains of about 30% in Brisbane, Adelaide, Perth and Darwin. Dwelling values include houses, townhouses, units and apartments.
On these projections, PropTrack’s current median dwelling value in Brisbane of $1.013 million would rise to approximately $1.317 million by the end of 2031. In Adelaide, the typical dwelling value is forecast to increase by about $272,000 to reach $1.18 million over the same period.
Perth’s median dwelling value is expected to climb by roughly $285,000 from today’s figure of $950,000, while Darwin’s median dwelling value is projected to rise by about $173,000 to exceed $750,000.
Sydney’s typical dwelling value of $1.24 million is forecast to reach about $1.55 million after an increase of 25%, with the report indicating that the typical house price could surpass $2.22 million. In Melbourne, overall dwelling values are expected to gain just under $240,000 (28%), moving from $854,000 to about $1.93 million, with the Victorian capital’s median house price projected to reach $1.4 million by the end of 2030.
Propertybuyer founder Rich Harvey (pictured right) said the projected 25–30% growth in major capitals would deepen the divide between households with existing property assets and those still trying to enter the market.
Noting a recent rise in first-home buyer activity following the expansion of the 5% deposit scheme late last year, Harvey said many prospective purchasers were responding to expectations of further price growth. “The only way the buyers can go into these markets is with generational wealth,” he said.
Harvey added that continued support from the “bank of mum and dad” would likely sustain demand and price levels, making ownership more difficult for those without access to intergenerational assistance.
The report suggests that many buyers may be pushed towards medium-density options, fringe or regional locations, or “rentvesting” strategies, where borrowers buy in more affordable markets while continuing to rent in their preferred area. These shifts could place further upward pressure on the limited pool of lower-priced properties.
“The other response is generational living, a lot of people are buying housing with the ability to do a granny flat either for them to move into or for their kids to,” Harvey said.
Deteriorating affordability
According to the analysis, fewer than 15% of the nation’s statistical area level two regions – localities with an average population of around 10,000 people – are currently on track to meet their new housing supply targets under the Accord. Harvey’s modelling indicates a larger shortfall than earlier estimates from the Property Council, citing workforce constraints, shortages of developable land, planning delays, rising construction costs and heightened insolvency risks for builders as key obstacles.
“Housing scarcity is now baked into the system,” Harvey said. “Migration and household formation continue to run ahead of new construction while capacity constraints are holding back development. Even if building activity accelerates, the gap will not close quickly. This has far-reaching implications for affordability, rents and investment.”
The report warns that affordability is likely to deteriorate further, with particular pressure on renters as population growth continues to outpace the stock of available homes. The impact is expected to be most acute in Brisbane, Perth and Adelaide, where vacancy rates are described as critically low.
From an investment standpoint, these three cities are identified as offering some of the strongest prospects for concurrent growth in both values and rents, given constrained supply and strong demand. Sydney is projected to record the largest absolute increase in dollar terms, while Melbourne is viewed as needing changes in state policy settings if it is to keep pace with other jurisdictions on supply and affordability.
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