New forecasts from Master Builders Australia revealed the country is set to miss the National Housing Accord target of 1.2 million new homes by over 166,000.
This marks a significant increase in the shortfall, up from 112,000 in earlier projections.
Master Builders anticipates only 1,034,000 new home starts by 2029, which is 13.8% below the goal.
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According to CEO Denita Wawn (pictured above), new home building is starting from its weakest position in a decade.
“The downgrade in our April forecasts is off the back of a prolonged battle to curb inflation, persistently high interest rates, and continued constraints on the supply side,” Wawn said.
She highlighted that workforce shortages are a key challenge.
“At the federal level, the government’s priority should be growing the building and construction workforce,” she said.
Wawn stressed the need for government action, especially in state-level planning reforms to address delays and costs.
“Productivity in the industry has fallen 18% over the last decade,” she said, calling for expedited reforms to help reduce the time it takes to build.
She also warned that inflation and rising costs are further hampering the industry’s ability to meet the housing demand.
In a silver lining, non-residential and civil construction sectors continue to grow, keeping economic growth positive.
Wawn highlighted that non-residential activity is expected to grow by 7.3% over five years, while civil construction will expand by 8.5%, driven by transport and utilities projects.
“We can’t build the homes we need without the appropriate commercial and civil infrastructure to support it,” Wawn said.
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