High interest rates and construction costs are choking off the supply of new housing, adding pressure to rents, squeezing first home buyers out of the market and putting the national target of 1.2 million new homes over five years out of reach, property experts say.

The outlook – from economists and analysts polled in The Australian Financial Review’s quarterly property survey – comes amid revelations over the past week that CFMEU pay deals and conditions in NSW and Queensland risk inflating the cost of new apartments significantly, making some projects unviable.