Albanese’s housing plan faces collapse as 34k homes bulldozed

23 hours ago 4

In one of Australia’s most demolished areas, On Spot Demolition director Mohamad Mahmoud takes a coffee break. Picture: David Caird.

Australia’s hopes of an Albanese government home building plan to pull the nation out of its housing crisis are being bulldozed with 34,000 homes demolished since it started.

There are now warnings from building industry groups that once homes being lost from the nation’s existing supply of housing are considered, Australia will fall close to 400,000 homes short of its national home building goal in net terms.

It includes a 200,000 loss of homes around the nation largely based on demolitions that will wipe out a substantial chunk of the nation’s housing supply.

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Since July 1, 2024, Prime Minister Anthony Albanese and federal treasurer Jim Chalmers have been pushing the nation towards a 1.2 million new homes in five years goal intended to stop property prices surging out of control.

The country has yet to reach the 20,000 homes a month target in home’s being completed, or even approvals, needed to reach that level, with Housing Industry Associations estimates now tipping just over 1 million new homes will be built in the timeline.

But even that is underestimating the situation faced by the nation.

Since the 2024 start date of the National Housing Accord’s 1.2 million homes’ five year timeline, Australia has approved the demolition of at least 34,000 residences nationwide — according to Australian Bureau of Statistics figures.

Approvals for construction in the same timeline are around 271,000.

A home in Melbourne’s Mt Waverley area is razed. It is one of the nation’s most demolished areas. Picture: David Caird.

It works out to losing one home for every eight we’ve approved to build so far.

The latest stats show that in just the first nine months of this financial year there were 14,991 demolitions given the green light nationally.

While NSW had the most demolitions approved overall at 5656, Melbourne had the highest number for any capital city at 4643 — with Victoria expected to lose 5444 residences in total.

Queensland was next at 2371, followed by Western Australia at 1182.

HIA economist Maurice Tapang said the upshot is that over the five year timeline, Australia is expected to lose six-figures worth of homes from the nation’s housing supply — severely eroding the number of homes the nation will wind up with in 2029.

“In net terms, we think it will be closer to 800,000,” Mr Tapang said.

“And that definitely isn’t enough to meet growing demand.”

HIA economist Maurice Tapang has warned once homes lost from supply are considered, the nation will fall close to 400,000 homes short of targets.

Pointing to migration figures of about 250,000 a year, the economist said the nation needed to build 100,000 homes a year just to cover international population increases — and needed significantly more to address its existing shortfall in housing supply if affordability was to be addressed in a meaningful way.

“If you have net housing supply increase of 800,000 over five years, that’s 160,000 a year,” Mr Tapang said.

“With an underlying shortage, that’s nowhere near where you need it to be to get affordability where you want it to be.”

Beyond the high-level data there are additional problems facing major cities, with some of the nation’s most demolished areas accounting for such a high share of approvals to remove homes that they will barely have any increase in their housing supply at all — based on data so far this financial year.

For every eight homes being approved nationwide, one is being demolished, ABS data shows.

In Melbourne’s Balwyn North region, there will be an increase of just eight homes, according to the contrasted figures.

In parts of Sydney’s Ryde region, just 39 new homes will be added to supply despite more than 90 being approved so far this financial year.

While it is possible additional approvals will come through off the back of demolitions and increase those numbers, the data suggests that state government hopes for more high-density housing in established areas is running into a demand problem as buyers fund one-for-one replacements or more modest developments.

Master Builders Australia chief economist Shane Garrett said demolitions were having a significant impact on the nation’s supply of housing.

“It is important to note that in many cases, a single old home is replaced by several medium or high density dwellings, expanding our stock of housing,” Mr Garrett said.

“In other cases, one detached house is knocked down to make way for another detached house. However, the new house is built to the most up-to-date standards and specifications. The quality of the housing stock is therefore enhanced.”

Demolitions will have a significant impact on how the nation goes with achieving the Albanese government’s housing goals. Picture: Nikki Short / The Australian / Newswire.

Master Builders Australia chief executive Denita Wawn said the recent federal budget would make the housing supply challenge worse.

“Independent modelling shows us that over the next four years the current federal budget proposals will cause new housing supply to fall by over 8,700, worsening an already 200,000 deficit while increasing rents by up to $9 per week,” Ms Wawn said.

“If we’re serious about improving affordability, we need to turbocharge supply and remove barriers to building by implementing accelerated depreciation for capital works, increases to the newly permanent Instant Asset Write Off, reducing unnecessary red tape by at least 25 per cent and investment in the construction workforce domestically as well as activating skilled migration.

“The parliament must also amend the Budget legislation to incentivise housing investment. Without the tax increases and with stronger investment in supply‑boosting measures, the Budget could have delivered a significant increase in housing supply, but it fell short.”

Australia’s Most Demolished Areas

Area	Demolition approvals	Home approvals	Net change
Balwyn North	88	96	8
Mt Waverley – North	81	100	19
Mt Waverley – West	78	163	85
Mt Waverley – East	75	80	5
Box Hill North	70	90	20
Ryde – North	69	113	44
Doncaster	64	128	64
Mt Waverley – South	60	101	41
Altona North	58	144	86
Blackburn	57	95	38
Oakleigh – Huntingdale	55	247	192
North Ryde – East Ryde	55	94	39
Heidelberg West	54	589	535
Point Nepean	54	100	46
Doncaster East – South	53	82	29
Keilor East	53	77	24
Camberwell	52	65	13
Bentleigh East – North	52	158	106
Oatlands – Dundas Valley	50	288	238
Wheelers Hill	50	47	-3