First Year Misses National Housing Target by 27%
Australia's plan to construct 1.2 million new homes over five years has fallen behind early, with the first year missing the mark by 27%. That shortfall amounts to roughly 66,000 homes, showing the country is not building at a pace required to meet its national goal. The slow start highlights ongoing challenges in the housing sector, despite a number of recent government reforms aimed at improving supply.
According to the Australian Bureau of Statistics, just over 174,000 new homes were completed across the country during the 2022–23 financial year. This makes it the lowest completion rate in three years and a poor beginning to the five-year national housing plan. The data illustrates that past delays and bottlenecks are still affecting outcomes even as new policies are introduced.
Many of the homes completed this year stem from projects started well before current reforms took hold. Recent efforts, such as faster development approvals previously held up by zoning rules, heritage concerns and environmental reviews, have not yet translated into completed builds. Other reforms included suspending changes to construction codes and backing prefabricated and modular housing, but those strategies are still in early stages and have not yet delivered visible results.
Industry groups and economists are warning that the target may be too ambitious. They believe the country would need to boost housing production to levels not previously achieved in order to meet long-term goals. Melbourne offers a clear example, with officials aiming to build more homes by 2050 than the city constructed in the preceding 180 years. This puts significant pressure on planning systems and construction capacity.
Meanwhile, new housing starts continue to fall rather than increase. In the June quarter, commencements of new detached houses dropped by 6.4%, the largest quarterly decline since September 2023. Multi-unit dwellings declined by 1.7%, showing a slightly smaller drop but still not enough to shift the trend. High material costs persist, and subdued interest rates have not led to the rebound many hoped for.
The shortage of housing is starting to affect other sectors, including education. A recent federal policy change linked international student placements to the housing capacity of universities. Institutions that could support accommodation needs, either independently or through partnerships, were awarded the bulk of nearly 295,000 spots for next year.
This change shows housing shortages are not just a social issue but an economic one, especially as Australia works to remain competitive in global education markets. Private developers in student housing have stepped up, offering purpose-built accommodation that would reduce pressure on the general rental market and help universities expand.
To reach the government’s vision, significantly more homes need to be built in coming years. With early targets already missed, many are urging for stronger reforms, better incentives and larger investment to help meet the ambitious goal.
