New home construction shows positive signs, but there's still a long way to go to reach the 1.2 million home target

The Australian housing sector has seen a promising incline in the construction of new detached houses, but the nation still faces a considerable challenge in meeting the ambitious target of 1.2 million homes set by the Housing Accord.

Data from the Australian Bureau of Statistics reveals that during the initial three months of the National Housing Accord, Australia commenced construction on 43,247 new homes. This figure represents a 4.6 percent increase compared to the June 2024 quarter and a 13.9 percent increase compared to the same period in 2023. 

The most significant surge was observed in the construction of new detached houses, with a 20.5 percent increase since June 2024 and a 5.3 percent increase over the year leading up to September 2024.

However, despite these positive developments, the total number of new homes starting construction over the year to September 2024 reached only 165,048, falling significantly short of the 200,000 required to stay on track for the Housing Accord target. 

If construction activity continues at the current rate, Australia is projected to start construction on just over 825,000 new homes over the next five years, resulting in a shortfall of approximately 350,000 homes compared to the Housing Accord target.

“Our performance in apartment construction will be the key to whether we meet the target. Apartment construction levels remain too low because the investment appetite is not there.

"Low productivity, labour shortages, costly and restrictive CFMEU pattern agreements, a lack of supporting infrastructure and a high inflationary environment all contribute to project costs not stacking up. 

"If we are going to solve the housing crisis, we need to build more apartments and make them more attractive for people to invest in - only then will we see a lowering of rental inflation and more homes for Aussies,” said Master Builders Australia CEO Denita Wawn. 

To read more off-the-plan property news click here.