New Data: Australia Already Behind on Housing Targets by 29%

4 February 2025
Wooden framework of a house

Australia is falling well short of its Housing Accord target in its first year, according to new ABS data analysed by Money.com.au. Building approvals for 2024 reached just 171,394 — 29% below the 240,000 needed annually to meet the government’s goal to build 1.2 million new homes by 2029.

As a result, Australia would now need 276,994 building approvals per year over the next four years to catch up and meet the target.

Money.com.au’s Property Expert, Mansour Soltani, says Australia’s housing supply crisis is far from over.

“Supply constraints, rising material costs, and planning delays continue to hold back construction and development in Australia. Without meaningful reforms to fast-track approvals or ensure builders can afford to ramp up projects, the gap between housing demand and supply could widen even further,” he says.

“If we’re already behind on our Housing Accord target, it raises serious questions about whether we can catch up in time or whether the goal was too ambitious to begin with.”

The National Housing Accord aims to deliver 1.2 million ‘well-located’ new homes across Australia between July 2024 and June 2029.

Short on Housing Accord target, but improvement in housing supply

While we’re behind on the Housing Accord target, there has been notable progress in boosting housing supply. Since the target period began in July 2024, building approvals have increased by 10% nationally compared to the second half of 2023, with declines recorded in only two states.

The Australian Capital Territory (ACT) was the worst affected, with approvals plummeting 75%, dropping to just 808 approvals in the second half of 2024. Tasmania also saw a decline, down 8% to 1,235 approvals.

All other states recorded an increase in building approvals in the last six months of 2024 compared to the same period in 2023. Western Australia led the surge with a 50% growth, adding 3,735 more dwellings. Queensland recorded a 23% increase, with 19,785 new approvals, while South Australia saw a 21% rise, reaching 7,021 new dwellings. Victoria recorded a modest 4% increase with 28,988 new developments, while New South Wales saw a 3% rise, bringing total approvals to 22,751.

In 2024, more than half of all building approvals (56%) came from NSW and Victoria, making their performance critical to Australia’s overall housing supply growth.

Money.com.aus Data & Research Expert, Peter Drennan, says sustained growth in NSW and Victoria is crucial for Australia to achieve meaningful increases in housing supply.

“NSW and Victoria are the engine rooms of Australia’s housing market — if they stall, the whole country feels it. While some states are picking up the slack, we simply won’t bridge the housing gap without strong and consistent growth in these two powerhouses.”