Productivity growth should help address these issues, said Oliver. “This in turn should make it easier to supply more new homes (houses and units) to the market which should make it easier to keep up with underlying population-driven demand for housing and to reduce the accumulated undersupply of housing.”
For the moment, these supply-side issues show little sign of improving. Oliver estimates there is between 200,000 and 300,000 undersupply of dwellings in Australia.
While Prime Minister Anthony Albanese’s Labour government has an ambitious target of building 1.2 million new homes by 2029, these targets have fallen woefully short.
For example, in the March 2025 quarter, only 43,517 new homes were completed nationwide – a 4% drop from the previous quarter – while housing starts, though up 14% to 47,645, remained well below the 60,000 homes per quarter needed to meet the 1.2 million target.
This persistent underperformance means new home approvals are tracking nearly 60,000 below the annual benchmark, with industry leaders attributing the slow pace to discouraging investment policies, lengthy approval processes, high development costs, and post-approval obstacles.