Every Australian state is lagging behind nationally-agreed housing targets as the federal government is accused of dragging its heels on addressing the national crisis.

The nation is likely to fall well short of an objective of constructing 1.2 million extra homes by July 2029, according to Master Builders Australia.

Australia is on track to produce 1.03 million homes within that timeframe, a shortfall of 166,000 properties, modelling released on Monday shows.

The figure has blown out from the group’s April forecast of a 112,000 shortfall.

The three states that will do the major lifting towards the national target – NSW, Victoria and Queensland – are all well behind, but every Australian jurisdiction is in trouble.

Housing Minister Clare O’Neil said the crisis would not be solved without “boldness and ambition”, labelling the situation an “unusual policy problem”.

“Interest rates have risen sharply and this has a big impact on building starts … it won’t be solved by making speeches in Parliament House in Canberra. The solution sits in the real economy,” she said.

“We face a chronic shortage of construction workers … we need 90,000 more workers in the residential construction sector to get the houses built that we need.”

Opposition housing spokesman Michael Sukkar took aim at the government, saying just $3 billion of its $32 billion in housing-related promises had been distributed.

“Labor has dragged its heels for more than two years on addressing their housing crisis and misleading Australians with farcical new funding announcements,” he said.

“It’s unclear how many dwellings have commenced construction, with no new homes believed to have even been completed.”

Committed to building 377,000 new homes across the next five years, NSW is only on track to produce 303,280 dwellings by July 2029.

Victoria is tracking around 21,000 houses short of its share, while Queensland is about 22,000 behind.

Master Builders chief executive Denita Wawn said high inflation, interest rates and supply constraints were hurting progress toward the long-term goal.

“We are expecting the market to gradually recover over the next few years as the macroeconomic conditions improve, but more work is needed to address the housing shortfall,” she said.

“Federal, state and territory governments have acknowledged the challenges around planning, workforce and productivity, but we aren’t seeing enough flow through on the ground.”

Productivity in the building industry had plummeted 18 per cent in the past decade, Ms Wawn said.

Victoria has heaped extra pressure on itself, setting a target of 800,000 new homes in the next decade, up from the 307,210 it is required to build in the next five as part of the national goal.

In NSW, approvals and completions have consistently lagged the 75,000 annual figure required to hit the state’s target in recent times.

Premier Chris Minns said fixing a sluggish planning system was the only way NSW could meet the goals.

“We’re under pressure to meet those targets, but it’s not for one reason, it’s for a whole range of reasons,” he said.

Master Builders NSW executive director Brian Seidler said the federal government needed to expand the construction workforce to be any chance of reaching the 1.2 million-home target.

“We need innovative approaches, including better apprenticeship incentives, reskilling migrants already in Australia, and launching an international campaign to attract skilled tradespeople,” he said.

 

Alex Mitchell
(Australian Associated Press)