‘Much uplift is needed’: Australia’s housing shortage needs to meet

A new report shows that the country’s new home supply is close to its lowest level in a decade.

The government-backed National Housing Supply and Affordable Commission said in its annual report on its annual housing system that 177,000 new homes were completed in 2024, lagging behind demand for the same period, with an estimated 223,000.

These completed projects are close to the lowest supply of new homes in about a decade.

The report now details Australia’s current housing needs, affordability conditions and forecasts for the coming years in its second iteration.

It also outlines the country’s supply related to the national housing agreement target, which will build 1.2 million new, well-located homes from 1 July 2024 to 30 June 2029.

According to the latest figures from the Council, the country will not be able to achieve this, with 938,000 new homes expected to be built in five years.

This means that the country will have 262,000 gaps – no state or territory targets are expected to meet its target share.

Council President Susan Lloyd-Hurwitz said: “The Australian housing system is far from healthy and is continuing to be under tremendous pressure.”

“Through decades when we persistently fail to provide enough homes to meet demand, the country is still trapped in the housing crisis.”

The council said that despite the gap, the national housing agreement targets 1.2 million households “still fit”.

Report Overview: “The objectives are ambitious, highlighting the scale of community challenges; communicating government policy intentions; inspiring and focusing across government, industries and community sectors; and promoting transparency, accountability and performance evaluation,” Report Overview.

“Such goals should exceed the expected needs to address significant unmet needs for housing in the system, including for homeless people and offset the impact of demolition.”

The Council’s forecast demand will take place over the 904,000 housing period, with 113,000 homes expected to be demolished and at least 1017 million new homes are needed to keep pace with demand.

According to the Council, the target of 1.2 million new homes is consistent with these principles, as it currently exceeds the current projected supply of about 28%, with projected demand plus demolition of about 18%.

What can the industry do?

The report notes that significant system-wide reforms, government support measures and industry innovations are needed to improve the housing system.

According to the Council, five key policies should be prioritized:

• Increase social and affordable housing

• Improve construction capacity and productivity

• Reform the planning system

• Provide further support to tenants

• Ensure Australia’s tax system supports housing supply and affordability.

In these five areas, the Council has made 15 policy recommendations.

Ms Lloyd-Hurwitz said: “A significant improvement is needed to support Australians who rely on social and affordable housing to shelter and serve as the basis for building lives and participating in communities.”

“The Council recognizes ongoing work across housing, including the work done by states and territories to enhance the planning system. Our collective focus requires a consistent and coordinated effort.”

The NSW government has pointed out its role in achieving goals, including a transport-oriented development program, which will offer 231,855 homes.

NSW Planning and Public Places Minister Paul Scully said it would never be easy to cover the deficit until mid-2029, given the costs of construction and economic stress.

“Today’s plan approval is 15% faster than in March 2023, an increase of 28% from the number of applications filed a year ago, while NSW has the most applications built in the country,” Mr Scully said.

“There are thousands of homes and DAs that are finalizing that these homes are adopting our planned reforms such as housing licensing agencies and low- and medium-term policies. We are building a pipeline that can really provide homes.

“The status of the housing system reports shows us that we have cut work for us, but as government, our priorities are right.”

Are you interested in buying and building new ones? Check out our New home part.