New figures show no state or territory is meeting its housing supply obligations
Australia is unlikely to meet its target of constructing 1.2 million homes by mid-2029, with a new government report warning of a significant shortfall that could worsen the country’s housing affordability crisis.
The National Housing Supply and Affordability Council (NHSAC) has projected a gap of approximately 262,000 homes if current building trends continue. The forecast, published in its State of the Housing System 2025 report, suggests that for every five homes needed, only four are expected to be completed.
The report found that no state or territory is currently delivering housing at a pace that meets its proportional share of the national goal.
Separate data released earlier this year showed that Australia had already fallen behind by more than 15,000 homes within the first three months of the initiative. By the end of 2024, only 171,394 building approvals had been recorded — far below the 240,000 needed annually to remain on track.
“The shortfall is a major concern for future home buyers and renters,” the report said. It highlighted that by the end of 2024, servicing a new mortgage required 50% of the median household income — well above the commonly cited 30% threshold for housing stress among lower-income households.
For prospective first-time buyers, the average time to save for a deposit now stretches beyond a decade. Renters are also feeling the pressure, with new leases consuming roughly 33% of median household income. This coincides with a national rental vacancy rate hovering at 1.8%, contributing to increased competition and escalating rents.
The report also underscored the housing market’s disproportionate impact on vulnerable populations. “The rate of homelessness among First Nations people has been about 8.8 times the rate for non-indigenous Australians,” it said.
In 2024, about 177,000 homes were completed — short of the estimated demand for 223,000 dwellings. Looking ahead, the council forecasts that only 938,000 new homes will be delivered between mid-2024 and mid-2029, falling short of the targets set under the Housing Accord.
As housing supply continues to be cited as a core issue in the affordability debate, the report calls for urgent policy intervention to address the widening gap between demand and construction.
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