According to the latest figures from the Australian Bureau of Statistics (ABS), residential construction grew by 7 per cent in the year to March. This included $24.275 billion spent on new home builds in the March quarter alone. However, the scale of growth remains inadequate to reach the goal of 1.2 million new homes by mid-2029.
The National Housing Accord, launched in 2023, was a collaborative effort to address the nation’s growing housing demand. Despite recent progress, the Australian Industry Group (Ai Group) has emphasised that a 40 per cent increase in dwelling completions is urgently required to stay on track. The current rate of construction does not align with the scale or urgency of the federal target.
Challenges plaguing the home building sector include soaring material costs, labour shortages, and lagging productivity. These factors create bottlenecks that hinder the industry’s ability to scale up output. Although residential building outperformed other construction sectors, overall construction activity remained relatively flat. Engineering projects declined, and non-residential building work slipped by nearly 4 per cent year-on-year.
There is a growing focus on building homes in the right locations. There is an ongoing debate about whether expanding on the outskirts of major cities or increasing inner-city density offers the most sustainable solution. Either way, new homes must meet quality standards and are supported by appropriate infrastructure.
The federal government’s evolving policy landscape suggests a shift towards more integrated urban planning. A key development has been the addition of “cities” to the housing minister’s portfolio. Housing Minister Claire O’Neil now oversees urban development, signalling a more unified approach to housing and planning. This structural change reflects a broader recognition that housing supply cannot be addressed in isolation from infrastructure, transport, and urban design.
Experts from the Australian Housing and Urban Research Institute have welcomed this shift, noting that effective planning requires coordination across multiple levels of government. The government’s recent National Urban Policy highlights the complex challenges facing Australia’s major cities, including affordability, accessibility, and sustainability.
As demand for housing continues to grow, the task ahead is not only to build more homes but to ensure that these homes support long-term urban resilience. The housing crisis remains one of Australia’s most pressing challenges, and while progress is being made, significant scaling up and strategic planning are essential to meet future needs.
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