The Albanese government has offered state and local councils $3.5 billion to fast-track the construction of 1.2 million homes over the next five years, in a bid to boost housing supply.

Less than two months after giving the states a one-off, $2 billion grant to immediately build or refurbish social and affordable housing, Prime Minister Anthony Albanese put $3 billion in “performance bonuses” on the table to encourage the states to accelerate land release, planning and approvals processes to build “well-located” homes.