According to a new report, the ongoing fuel crisis could further delay Australia’s progress towards 1.2 million new homes.
The National Housing and Affordability Council (NHSAC) released its State of the Housing System report for 2026, which found the conflict in the Middle East has brought “heightened uncertainty to the outlook for housing supply”.
The report, now in its third iteration, follows the NHSAC release of its first quarterly report, in late March, to show Australia's progress towards the National Housing Accord target of building 1.2 million new homes by mid-2029.
NHSAC chair Susan Lloyd-Hurwitz presented the report's findings at the National Housing Solutions Summit in Melbourne. Picture: Supplied
According to the State of the Housing System 2026 report, conditions in early 2026 were showing improvement with the council estimating new housing supply would land at 980,000 over the five-year Housing Accord period – which is 42,000 more homes forecasted than in last year’s report.
This means Australia would have reached its 1.2 million new homes target by the September quarter of 2030 – slightly one year over the Accord’s end date of June 2029.
But, nine weeks since the conflict began in the Middle East, there is growing uncertainty around how this could further delay that number.
In her address to the National Housing Solutions Summit in Melbourne, held on 30 April, housing minister Clare O’Neil said the industry is operating in a “really tough global environment”.
“We’ve got high costs, supply chain pressure and it’s obviously got real impacts on Australians here at home,” she said.
Ms O’Neil noted that the report modelled two main scenarios, accounting for short-term and long-term effects from the conflict.
The short-term scenario assumed the sector faced a 6% peak in construction costs in the middle of 2026, resulting in 10,000 fewer homes built to mid-2029.
The long-term scenario, which assumed it would take three years for oil prices to return to its pre-conflict price, forecasts the sector would face a 10% peak increase in construction costs in the middle of the year, and that would result in 33,000 fewer homes built to mid-2029.
“So obviously, we can't hide from the fact that the conflict in the Middle East is having an effect on every part of our economy but especially those that have large uses of diesel. All construction falls under that banner,” Ms O’Neil said.
“The one most important thing I know the Commonwealth needs to do is make sure we are doing everything we can to secure our fuel for the sector so we can continue to build homes.”
State-by-state performance
According to the report, early 2026 estimates forecasted that ACT, Victoria and Western Australia would reach their share of the Accord target either within the year of or just after the Accord deadline.
NSW deputy secretary of planning, land use strategy, housing and infrastructure Monica Gibson speaking at the National Housing Solutions Summit. Picture: Supplied
Queensland was expected to reach it by September quarter 2030 and remaining states and territories were expected to take longer.
In a panel discussion around productivity and planning reform, NSW deputy secretary of planning, land use strategy, housing and infrastructure Monica Gibson addressed how NSW is expected to reach its share of housing targets by June 2031.
“NSW is coming from a lot further back. We’re on track for less than half of the 377,000 homes in the reaching the Accord,” she said.
“We’ve got nearly 80,000 homes under construction today and that’s the largest number across jurisdictions.”
What can be done?
In a speech to the National Housing Solutions Summit, NHSAC chair Susan Lloyd Hurwitz said there are many challenges within the housing system and there’s no “silver bullet” to address all issues.
“People often ask 'what is the one thing that should be done?' There are many things that will have to be done at the same time. We all know there is no silver bullet, as much as we would like there to be one,” she said.
Treasury director general for housing Ben Rimmer with Ms Lloyd-Hurwitz during a panel discussion. Picture: Supplied
According to the State of the Housing System report, the council outlined six priorities for housing reform.
One specifically targets productivity in the construction sector, and another notes how best practice should be applied to planning systems.
During a panel discussion with Ms Lloyd Hurwitz, Treasury director general for housing Ben Rimmer said there needs to be greater alignment across the system.
“A large part of that is driven by planning but not all of it is about planning,” he said.
“I’m very focused on all of those things that sit on top of the planning system and that take so much time and energy in the system – sometimes delaying projects by three, six, nine months just for one approval.
“We need to use, as a Commonwealth, all of our available levers to try and get our whole system aligned around that.”
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