Australia is set to miss its target of building 240,000 new homes in the first year of a housing affordability program by over 60,000. The Housing Industry Association predicts only 178,839 new homes will be constructed next year, rising to 195,105 in 2025. A recent national cabinet meeting aimed to address the housing shortage by adding 200,000 homes to a goal of one million new residences by 2029. Economists suggest state governments should attract foreign investors, reconsider property taxes, and hasten planning processes to meet targets and enhance affordability.
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Australia is facing a significant challenge in meeting its ambitious housing affordability program targets. The country is expected to fall short by more than 60,000 new homes out of the required 240,000 in the first year of the program. An economist has highlighted that state governments must take specific steps, like encouraging foreign investors, rethinking property taxes, and speeding up planning processes, to bridge this gap.
The Housing Industry Association's National Outlook report has revealed that only 178,839 new homes, including apartments, townhouses, units, and houses, are projected to be constructed in the upcoming year. The projections for 2025 indicate an addition of 195,105 homes to the nation's housing supply.
This situation comes in the wake of a recent national cabinet meeting where the focus was on addressing Australia's housing shortage. The meeting aimed to add 200,000 homes to the existing target of building one million new residences across the nation by the end of 2029. Achieving this new target would require an annual construction of 240,000 new homes. States that exceed this target will be eligible to access a $3 billion incentive fund, as announced by the Prime Minister.
HIA's senior economist, Tom Devitt, pointed out that Australia managed to build 231,183 homes during the HomeBuilder boom in 2021 and 234,234 homes during the 2016 apartment boom. He expressed that the revised target, though ambitious, is achievable and would contribute to enhancing housing affordability.
To meet these targets, it is crucial to establish better planning strategies that release land for development. However, Devitt emphasized that it's equally important to incentivize investors, including foreign investors. Additionally, revising taxes related to development and investment, particularly state-based charges on international buyers, should be considered on a nationwide scale.
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