Did anyone really believe the ambitious target of building 1.2 million homes in five years, announced two years ago as part of the National Housing Accord, was achievable?
For those with solid experience in the property sector, it seemed far-fetched from the get-go.
The plan aimed to deliver these homes starting mid-2024, but barely a year into the five-year timeline, it’s clear the idea is sinking fast. Research now confirms what many already suspected – the housing plan is officially “dead in the water.”
The Urban Development Institute of Australia (UDIA) recently released its 2025 State of the Land report, and the numbers are grim. A shortfall of 400,000 dwellings is expected in our combined capital cities by 2029, based on their forecasts of market activity.
While there are some glimmers of hope in the national greenfield market showing improved activity, the apartment and multiunit sector is struggling, still stuck at alarmingly low levels of output. This is dragging down overall housing production.
Why is this happening? According to the report, it’s a combination of rising material costs, labour shortages, inflation, and interest rate hikes – all squeezing the sector and prolonging the supply issues.
Over the past two decades, new dwelling growth has consistently lagged behind population growth, and this supply gap fuels our current rental and housing affordability crisis.
Looking ahead, UDIA projects an 11 per cent decline in new dwelling production in 2025, which will only push residential property prices higher.
But if you’re a property owner or investor, there’s a silver lining. With housing undersupply showing no signs of easing, the outlook for capital growth in major cities is highly promising – provided you buy strategically and focus on the long-term.
Looking for help? Whether you’re buying your first property, expanding your portfolio, or stepping into property development, we’re here to tailor a personalised solution for your needs. With our trusted holistic approach, we help new and seasoned investors and homebuyers achieve their financial dreams.
