Australia is experiencing serious challenges as it falls significantly short of its National Housing Accord targets set to address the housing crisis by 2029. Recent data from the Australian Bureau of Statistics (ABS) indicates the country approved only 171,394 building projects in 2024, representing a staggering 29% shortfall against the annual requirement of 240,000 approvals needed to reach the ambitious goal of constructing 1.2 million homes within the specified timeframe.
To meet this target going forward, Australia would need to see approvals jump to 276,994 new homes each year for the next four years, highlighting the scale of the challenge. Mansour Soltani, a property expert at Money.com.au, outlines some of the key hurdles facing Australia's construction industry.
"Supply constraints, rising material costs, and planning delays continue to hold back construction and development in Australia," Soltani stated, expressing concern over the rapid pace needed to meet the objectives. "If we’re already behind on our Housing Accord target, it raises serious questions about whether we can catch up in time or whether the goal was too ambitious to begin with." This sentiment is echoed throughout various sectors as stakeholders await effective solutions.
Despite this overall decline, there was, interestingly, a 10% national increase compared to the second half of 2023. Yet, this statistic is somewhat misleading, as two key states, the Australian Capital Territory (ACT) and Tasmania, recorded significant drops. The ACT saw approvals plummet by 75%, down to just 808, which is indicative of broader systemic issues affecting urban planning and approval processes.
On the other end of the scale, Western Australia led growth with 3,735 additional dwellings approved, reflecting diverse conditions across the country. Queensland also showed positive signs, with approvals rising by 23% to 19,785, and South Australia saw improvements as well, with new approvals reaching 7,021. Victoria and New South Wales, two states central to Australia's housing market, saw more modest growth of 4% and 3%, respectively. Together, these states represent 56% of all approvals made during the year, showcasing their significant role.
Peter Drennan, another expert from Money.com.au, emphasized the necessity of strong performances from these two regions by stating, "NSW and Victoria are the engine rooms of Australia’s housing market — if they stall, the whole country feels it." Clear patterns of dependency and economic interlinking are at play here, emphasizing the need for balanced growth across all states.
Looking closely at the statistics, three months after the introduction of the National Housing Accord, outcomes remain disheartening. Just 44,884 homes were constructed nationally during the September quarter, leaving Australia behind by over 15,000 homes to meet the interim quarterly target of 60,000 new homes. The shortfall is particularly stark for the Northern Territory, which produced 78.6% fewer homes than required for its quarterly target of 571. On par with these issues are Tasmania and New South Wales, which are behind by 46.1% and 40.4%, respectively.
Matthew Kandelaars, Group Executive Policy and Advocacy at the Property Council, urged immediate action, expressing urgency concerning the impending timeline. "If we don’t start as we intend to finish, we’ll be kickinginto a gale at the final break – making the job near impossible," he warned. With the clock ticking, the disparities between states contribute to the growing concern over overall housing stock, affordability, and accessibility.
Kandelaars continued, elaborately framing the targets as imperative for tackling the national housing supply shortage. "It is what’s needed to close the national housing supply shortage. It’s much more than just numbers; it’s about getting Australian families the homes they deserve," he said, calling for focused government efforts.
The forthcoming actions from the next term of the Federal parliament are anticipated to revolve around addressing affordability issues through tax reforms, reducing bureaucratic hurdles, and tackling the pressing shortages of skilled labor necessary for construction.
The statistics paint a grim picture, underscoring the urgent need for reform. New housing commencements have increased by 4.6% from the June quarter, but for the country to align with National Housing Accord expectations, sustained growth will be required immediately.
With the ambitious goal of 1.2 million homes by 2029, the focus must shift to systemic changes and collaborative efforts among states to avoid getting trapped too deeply behind targets. The stakes are high as the clock keeps ticking on this pressing national issue.