Australia’s plan to build 1.2 million new homes by 2029 is falling short of its goals, according to the State of the Housing System 2025 report published by the government’s National Housing Supply and Affordability Council (NHSAC).
The council’s report predicts Australia will fall roughly 262,000 homes short of the goal, a failure attributed to the nation’s ongoing housing market challenges.
“Housing affordability continued to deteriorate in 2024,” the report observed. “The share of income that the median-income household needed to service the average new mortgage rose to 50%, while for renters the share of income needed to pay rent for the median new lease rose to 33%. For aspiring homeowners, the average number of years required to save for a deposit rose to a near-record high of 10.6 years, and the ratio of dwelling prices to income rose to 8.0. The share of homes for sale that a median-income household could afford declined to 14% – its lowest level on record.”
The report further noted, “The decline in affordability reflected the fact that housing costs rose quicker than household income. Nationally, dwelling prices rose by 4.9% over 2024 and by a further 0.7% over the first three months of 2025. Advertised rents rose by 4.8% over 2024 and a further 1.7% over the first three months of 2025. In contrast, mean household income rose by 4.3% over the year to September quarter 2024.”
The report also warned rental affordability has worsened, point out that “more than half of lower-income renter households – defined as households in the two lowest quintiles of the income distribution – were in rental stress in 2023, the latest year for which data is available. Many renters faced ongoing rental stress, with 60% of those in rental stress experiencing two or more consecutive years of rental stress.” Rental affordability problems were elevated among Australia’s indigenous population, while waitlists for public housing were close to record highs.
The supply and demand imbalance continued to be acute, with the report highlighting that the “supply of new homes was around its lowest point in about a decade in 2024, with 177,000 dwellings completed. After accounting for demolitions, the Council estimates that 155,000 dwellings were added to the housing stock (the net new supply) in the year to December 2024.”
