AUSTRALIA is on track to see more than 1M new homes built over the next five years, according to the Housing Industry Association’s (HIA) latest outlook, but the total still falls short of the federal target of 1.2M.
HIA Chief Economist Tim Reardon said recent policy shifts, along with stronger-than-expected population growth, has prompted an upgrade in the association’s forecasts for new housing commencements. The revised outlook predicts 1.01 million new homes will begin construction by June 2029, up from the earlier forecast of 986,000.
“Higher than previously anticipated population growth, and changes to government policy, have resulted in an upgrade to our forecasts,” Mr Reardon said.
The HIA’s quarterly Housing and Economic Outlook Report notes that declining interest rates have helped lift construction activity, though the gains are uneven across states and housing types. New South Wales and Victoria continue to lag behind Western Australia, South Australia and Queensland due to higher land and supply costs.
“Indications are that Australia’s population growth will remain elevated and exceed 30 million before the end of 2030. This will force up the price of established homes and increasingly see new home construction as a cheaper alternative,” Mr Reardon said.
Government initiatives—such as New South Wales’ plan to underwrite apartment sales and fast-track approvals, along with the Federal Government’s move to reduce Lenders Mortgage Insurance for first-home buyers—are expected to add thousands of dwellings to supply. HIA estimates the deposit scheme alone could support an additional 10,000 homes per year.
The report also forecasts growth in detached housing and multi-unit projects over the coming years. Detached house starts are expected to rise 7.2 per cent in 2025 to around 115,000 before peaking at more than 125,000 in 2027. Multi-unit construction, meanwhile, is tipped to climb sharply from 72,000 in 2025 to almost 100,000 by 2029, as apartment developments become more financially viable.
Mr Reardon said structural factors such as population flows and planning policy would continue to shape where and how new housing stock is delivered.
“Home building activity will flow to those regions with the lower cost of delivering new homes to market,” he said.
While forecasts point to steady improvement, the HIA maintains that significant reform is still needed to meet the national housing target and keep pace with demand.
