A comprehensive analysis of why Australia cannot build enough homes, why demand is crushing supply, and how immigration is amplifying the crisis — with a data-driven 5-year plan for a balanced future.
Against the 240,000/year Housing Accord target
Record high — nearly double the 2002 level of ~4.5×
For a 20% deposit on a median-priced home
Rents up 43.9% vs wages up 17.5% over 5 years
Requiring ~207,200 new dwellings — more than annual construction output
Down from 30% in 2019–20 for a household on $150,000
Rough sleeping up 22% in 3 years to 2023–24
Projected by 2027 — nearly double the typical vacancy rate
Australia is simply not building enough homes. For the better part of two decades, the supply of new dwellings has failed to keep pace with population growth and the natural rate of household formation.
The National Housing Accord requires 240,000 new homes per year over five years. In Year 1, only ~174,000 were completed — a shortfall of 66,000, or 27% below target. The National Housing Supply and Affordability Council (NHSAC) projects a cumulative shortfall of 262,000 homes over the full Accord period.
"For years, we have struggled to build the new homes Australia needs against a backdrop of worsening labour shortages, longer delays in build times, and escalating costs."
— Master Builders Australia, January 2026
The construction industry faces a perfect storm: a projected shortfall of 300,000 skilled workers by 2027, construction productivity that has more than halved over 30 years, and record builder insolvencies driven by 40%+ cost increases since the pandemic.
Against the 240,000/year Housing Accord target
Projected by 2027 — nearly double the typical vacancy rate
Annual dwellings completed vs. the 240,000/year required under the National Housing Accord
Structural barriers preventing housing supply from meeting demand
The chronic failure to supply enough housing has had devastating consequences for affordability. The national house price-to-income ratio has reached a record 8.2× — nearly double the level of 2002.
For renters, there is no refuge. Vacancy rates hover near record lows of 1.2–1.9%, while rents have surged 43.9% over five years against wage growth of just 17.5%. The average tenant now spends 33.4% of pre-tax income on rent.
The human cost is stark: 122,000 Australians are homeless, rough sleeping has risen 22% in three years, and 1.26 million low-income households are in financial housing stress.
Record high — nearly double the 2002 level of ~4.5×
For a 20% deposit on a median-priced home
Rents up 43.9% vs wages up 17.5% over 5 years
Down from 30% in 2019–20 for a household on $150,000
% of housing stock affordable for a household on average income — 2019–20 vs. 2024–25
Indexed growth since 2020 — rents rising 2.5× faster than wages
Social housing has declined to just 4% of all dwellings in 2024 — down from 4.7%. Waitlists extend beyond a decade in some regions, and between 2016–2022, waitlists grew by 26,000 households while entries to social housing fell by 6,400.
Unassisted requests for homelessness services have risen from ~105,000 in 2021–22 to ~129,000 in 2024–25. The market alone will never solve this — direct government investment is essential.
Immigration has long been a cornerstone of Australia's prosperity. But in the context of a chronically undersupplied housing market, a rapid surge in Net Overseas Migration has acted as a powerful accelerant to demand.
At the post-COVID peak of ~518,000 NOM in 2022–23, migration alone generated demand for an estimated ~207,200 new dwellings — more than the entire annual output of the Australian construction industry.
The core issue is not immigration itself, but the failure to link immigration policy with housing and infrastructure capacity. Canada recently cut new temporary residents by 43% in direct response to its housing crisis — contributing to a 15-month decline in advertised rents.
Requiring ~207,200 new dwellings — more than annual construction output
Estimated new dwellings required from NOM (at 2.5 persons/household) vs. actual completions
| Year | NOM | Dwellings Required | Completions |
|---|---|---|---|
| 2022–23 | ~518,000 | ~207,200 | ~177,000 |
| 2023–24 | 429,000 | ~171,600 | ~174,000 |
| 2024–25 | 306,000 | ~122,400 | ~174,000 |
Dwellings required calculated at 2.5 persons/household. Source: ABS, NHSAC.
Restoring balance to Australia's housing system requires a bold, sustained, and coordinated national effort. The following plan outlines concrete, evidence-based policy actions across five pillars. Click any pillar to filter, or expand individual actions to read the full recommendation.
Select a pillar to filter actions, or click any action card to expand its full description.
33 data points across 6 categories · Press ⌘K for full search
1.2 million homes over 5 years
National Cabinet endorsed a target of 1.2 million new, well-located homes over five years from July 1, 2024 — requiring 240,000 completions per year.
Source: National Housing Accord / Treasury
~66,000 homes
In the first year of the Housing Accord (2024–25), approximately 174,000 dwellings were completed against a target of 240,000 — a 27% shortfall.
Source: AFR / ABS
262,000 homes
The National Housing Supply and Affordability Council forecasts only 938,000 new dwellings will be built over the 5-year Accord period, implying a total shortfall of 262,000 against the 1.2 million target.
Source: NHSAC State of the Housing System 2025
200,000–300,000 homes
AMP chief economist Shane Oliver estimates Australia has accumulated a cumulative housing deficit of between 200,000 and 300,000 homes over many years.
Source: AMP / MacroBusiness
400,000 homes by 2028–29
KPMG has warned that if high immigration rates persist alongside weak supply, the housing shortage could double to 400,000 homes by 2029.
Source: KPMG Housing Affordability Report
~174,000
Australia completed approximately 174,000 new dwellings in the 2024–25 financial year, well below the 240,000 required under the Housing Accord.
Source: ABS
8.2×
The national dwelling value-to-income ratio reached a record high of 8.2 in September 2025, meaning the median dwelling costs more than eight times the median household income.
Source: Cotality
10.6 years
The average time required to save a 20% deposit for a median-priced home has blown out to 10.6 years as of December 2024.
Source: NHSAC State of the Housing System 2025
50% of median household income
In December 2024, 50% of the median household income was required to service a new mortgage — far above the 30% housing stress threshold.
Source: NHSAC State of the Housing System 2025
12% of housing stock
A first-home buyer household on an average income of $180,000 could only afford 12% of the housing stock in 2024–25, down from 30% in 2019–20.
Source: KPMG Housing Affordability Report
Surpassed $1 million AUD
The average price of an Australian home surpassed $1 million AUD for the first time in June 2025.
Source: BBC News
1.2%–1.9%
National rental vacancy rates hovered near record lows of 1.2–1.9% throughout 2025. A healthy market is typically considered to have a vacancy rate of around 3%.
Source: Cotality