Aussie housing plan in crisis, half the nation building less

The Albanese government kicked off a National Housing Accord to address Australia’s housing crisis a year ago. It’s not going well. Picture: Toby Zerna.

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Australia’s efforts to build its way out of a housing crisis are going backwards in huge chunks of the nation amid warnings state government policies are putting up roadblocks.

While the country’s number of new home approvals rose last year, at the suburban level almost half the country went backwards with approvals declining compared to the year before.

It’s a concerning trend as the nation struggles with a National Housing Accord plan to build 1.2 million homes between July 1, 2024, and June 30, 2029.

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Australian Bureau of Statistics data shows there were 186,000 approvals for new homes across the country in the 2024-2025 financial year, the first 12 months of the Accord’s timeline.

To hit the 1.2 million homes target the country needed to achieve 240,000 a year.

The data shows while there were upticks compared to the prior financial year, the nation’s two biggest building states only had modest increases.

Victoria approved 56,500 new homes, outpacing the 49,000 given the green light in NSW, and together they are the nation’s biggest builders.

Both states’ governments are driving policies to increase apartment and townhouse construction, despite the majority of the biggest numbers of new home approvals coming from new housing estates in all of the nation’s major capitals.

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Victoria’s situation is seen as particularly problematic, as while its approval numbers rose by about 5000 from a year ago, the state had more suburbs record a decline in new homes being planned for them than those that increased the figure.

In effect 20 suburbs were responsible for almost two thirds of the state’s increased approvals.

Apartment hot spots had the biggest jumps, including Docklands which posted the biggest increase, with a 1238 home jump over the past year, followed by Southbank at 940 and South Yarra with an 805 new home approvals increase.

The 20 top performing areas have increased approvals by 9773, the vast majority of the 15,819 increase across the 238 areas reporting an uptick.

Suburbs that host new housing estates are consistently posting some of the biggest numbers of new housing approvals around the nation.

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But 252 of the state’s 521 level 2 statistical areas, a region roughly analogous with a suburb, went backwards or were flat in that time — with approvals for new homes dropping a combined 11,076.

Another 30 areas had no change, leaving the vast majority of the growth to come from just 20 which recorded surges in excess of 200 new homes.

The problem is being replicated in NSW, where 328 areas recorded a decrease in new housing approvals in the past financial year, compared to 316 where numbers rose.

In Queensland there were more areas with increasing numbers of home approvals compared to the prior financial year, with 313 SA2s on the increase list against 236 on the decrease.

But a section of the Gold Coast recorded a 1155 new home approval decrease, the biggest downshift in the country. The state’s biggest increase for a single area was Brisbane city, up 635.

South Australia had one of the better overall performances with 109 of its suburbs recording an increase in approvals, and just 68 declining.

Nationally, there were 1242 areas that notched an increase in approvals, compared to 1216 that lost ground.

In more than 1200 suburbs the number of new housing approvals actually fell compared to the year before, during the first 12 months of the National Housing Accord.

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The data also shows the most consistent delivery of new homes has been coming from new housing estates on the city’s fringes, with Victorian areas dominating the busiest new housing spots around the country.

Apartment-centric Docklands topped the list with 2035 approvals, but was followed by new housing estate hot spots Mickleham and Rockbank, both above 1800.

Sydney’s Castle Hill was next, and another win for units, followed by the Melbourne area of Fraser Rise, then WA’s Alkimos-Eglinton region.

Wollert in Victoria, Ripley in Queensland and Box Hill in NSW rounded out the top 10, all of them representing new housing estates.

The Urban Development Institute of Australia has been tracking a notable disparity between development in new housing estates and medium-density housing locations compared to apartment markets.

High-density apartment construction has a variable track record for delivering homes, often swinging from high approval numbers to smaller growth.

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While the latter can show large swings from year to year, the new estates are delivering more consistent volumes due to lower housing construction costs.

UDIA national president Oscar Stanley said they were concerned that if state governments continue to push programs aimed at increasing higher density development, it could lead to them falling short on housing construction goals.

“State Governments who don’t maintain a steady supply of detached houses will inevitably fall short of their housing targets and likely see housing affordability worsen,” Mr Stanley said.

“In addition to increased supply, diversity of housing stock is also crucial to improving affordability. Governments need to be facilitating a mix of low, medium and high-density housing options so people can choose what best suits their needs. A reliance on densification will not solve the housing issue.”

Housing Industry Association economist Maurice Tapang said their forecasts currently indicated Australia would build 1,012,615 new homes by the 2029 target date.

But the real increase in housing could be significantly smaller, with demolitions data suggesting about 20 per cent of the homes commenced in a given quarter were being matched by others being torn down.

HIA economist Maurice Tapang says with demolitions also occurring, the real increase in the number of homes around the nation may be quite a bit less than current estimates.

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While they were increasingly positive in their estimates on apartment construction increasing, Mr Tapang said Victorian government policy moves were less likely to be effective than those interstate as none had yet addressed the fact that lower home value growth over the past two years meant it was simply cheaper for homebuyers to get an established unit than a new one.

“And with apartments there’s a whole lot of things that can lead to construction not commencing until five years down the line.”

The boss of Australia’s biggest home builder said Victoria’s growth corridors had “struck the right formula” in delivering communities people wanted to be a part of and councils working with developers and builders to get things moving.

Metricon chief executive Brad Duggan said in many instances they could build a newly approved, single-level house in 60 days and double-storey homes in 100 days — building more demand for new homes as word of mouth went from one family to the next.

“In areas like Mickleham–Yuroke and Rockbank–Mt Cottrell, families see opportunity: new communities, infrastructure coming online and the chance to get into a brand new home without the established market pressure; that confidence translates into approvals,” Mr Duggan said.

“And cost is absolutely a decisive factor. When families can build a modern, energy-efficient home for under $400,000, it becomes a far more attractive proposition than competing for established stock.”

Metricon chief executive Brad Duggan says the nation’s biggest movers of new home sales are affordability, and buyers wanting to be part of a new community. Picture: Richard Walker.

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Mr Duggan said the biggest handbrakes on getting more homes built nationally was land supply, slow planning systems and infrastructure failing to keep pace.

While Victoria had done a better job of producing more land, he said it was now struggling to keep up with the roads, sewers and connections needed to turn that land into homes.

“New South Wales continues to struggle with lengthy and unpredictable approvals,” he said.

“Queensland has the demand, but not enough rezoned and serviced land in the growth corridors where people actually want to live. Until that land is unlocked, the state won’t be able to contribute its fair share to national housing targets.

“Across every major market, the story is the same: we have willing buyers and willing builders, what we need is a planning and land-release system that matches that ambition.”

He said the only way to reach the nation’s 1.2 million homes target now was to streamline land releases and infrastructure delivery.

“The target is achievable, but not under business as usual settings,” Mr Duggan said.

“The nation doesn’t have a construction capacity problem. Builders can deliver homes quickly, in our case, 60 days for a single storey home and 100 days for a double storey. What we need is the land and approvals pipeline to match that pace.

“If governments, councils and industry pull in the same direction, this target is absolutely within reach. Housing must be treated as a national economic priority, because it is.”

Aussie Areas Adding Most To Housing Supply

Source: ABS

Aussie Areas With Biggest Declines In Housing Supply

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