Australia to fall short on housing target by about 20% says property economist | The Business

To hit the federal government’s housing accord target, Australia will need 1.2 million dwellings in five years, or 60,000 underway each quarter.

But two years in from the announcement in 2024, the country is undershooting that target by 20 per cent, pointing to around one million new dwellings by 2029.

The good news is construction has hit an historic high.

Housing economist Cameron Kusher has been crunching the numbers and joins The Business to discuss.

He says while Australia is likely to miss its housing target, there are some encouraging signs in the construction sector, as the latest building activity data shows an increase in dwelling commencements over the quarter, adding to the last three or four quarters where there’s been an uptick in commencements.

“Completions also rose over the most recent quarter from a fairly low base. But I think what we’re looking at now is because we’ve got this very large pipeline of properties under construction, we’ll probably continue to see those commencement numbers pick up, and obviously that’s really encouraging,” he says.

“But I think the downside of this is we’re still nowhere near that housing accord target where we want to be completing 60,000 new dwellings a quarter. It was only around 49,000 completions for the quarter.”

Mr Kusher says the target will likely still be missed despite renewed interest from investors in new builds.

He says the federal government’s tax changes to negative gearing and the capital gains tax discount, encoraging investment in new builds, may be starting to show up in the quarterly ABS investment figures.

“We have seen the number and the value of new lending to investors buying brand new properties increase over the quarter, so there is some evidence that the behaviour is changing.”

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