Housing affordability: Nation unlikely to meet housing targets amid increasing voter concerns over affordability

The Albanese government has been told to “stop spruiking a fake promise” and admit it will not meet national housing targets amid mounting voter concern over affordability.

The Albanese government has been told to “stop spruiking a fake promise” and admit it will not meet national housing targets amid mounting voter concern over affordability.

Housing experts have cast doubt over the nation’s ability to meet the 1.2m new homes by 2029 target as the latest figures show more than 800 construction companies went bust in the first three months of the financial year.

It comes after polling by Redbridge and Accent found that housing affordability and concerns over falling living standards and retirement are set to be key issues at the next election.

Shadow housing minister Michael Sukkar said the Labor government would be lucky to build 800,000 homes in the next five years and said home ownership had never been more unattainable.

“This [estimated homes to be built] is far less than what was built under the former Coalition government, where the number of dwellings commenced during the last full five calendar years from 2017 to 2021 was 1,028,703,” he said.

“The minister needs to fess up, stop spruiking a fake promise and finally put an end to this charade.”

Housing Minister Michael Sukkar Michael Sukkar. Picture: NCA NewsWire / Gary Ramage

MasterBuilders Australia has warned of a possible shortfall of 400,000 dwellings to the 1.2million target due to costs, labour shortages and low productivity.

MBA chief economist Shane Garrett said the cost of building a new home had increased by 40 per cent since the pandemic due to the rising cost of materials including steel and timber and labour shortages.

“The key problem is it’s too expensive to create new homes and it takes too long,” he said.

“Because of those two things, the homes that do get built are too expensive.”

NSW is facing a shortfall of 150,000 houses of the target of 377,000 new homes by 2029, a deficit of about 40 per cent, according to research by the Urban Development Institute of Australia.

UDIA NSW chief executive officer Stuart Ayres said the commonwealth government could bring forward incentive payments to state and territory governments to fasttrack investment in housing.

“The other thing that makes a huge impact to the cost of homes is the cost of infrastructure that is passed on to home buyers called a developers contribution that goes towards servicing infrastructure costs,” he said.

About 833 construction companies entered insolvency in the first three months of the 2024/25 financial year, according to preliminary figures from the Australian Securities and Investments Commission.

Prime Minister Anthony Albanese Prime and His Majesty King Jigme Khesar Namgyel Wangchuck, the King of Bhutan. Picture: NewsWire / Martin Ollman

UNSW Professor Chyi Lin Lee said housing affordability was unlikely to improve in the short term unless significant supply came into the market and said the solution likely lay in higher density housing such as apartments.

“It’s nice if everyone can live in detached houses but it would be nicer to make sure people can live close to where they work,” he said.

Freelancer chief executive officer Matt Barrie said the price of housing in Australia was “completely insane” and posed challenges to businesses managing workers struggling amid an affordability crisis.

“How does the government expect business to function when salaries are not useful to buy a house,” he said.

“If you are running a business, what are you meant to say to your workers?”

Independent MP Dai Le said housing affordability was one of the key issues in the electorate of Fowler in Sydney’s west, a previously safe Labor seat that she won at the last election.

“Housing costs are affecting everybody, for those with mortgages the high interest rates are pushing families to the brink, and those renting are seeing multiple rent rises and are feeling extremely vulnerable with the lack of housing stock available,” she said.

Originally published as Housing affordability: Nation unlikely to meet housing targets amid increasing voter concerns over affordability