New research from Mandala Partners, commissioned by the Property Council of Australia, highlights a ‘looming’ shortfall of 462,000 homes against Australia’s 2029 housing target.
The report warns that missing the goal of 1.2 million new homes in well-located areas could significantly impact affordability. However, achieving the target could save renters an average of $90 per week – equivalent to $4,680 annually.
In response, the Property Council has proposed doubling the New Homes Bonus – a $3bn reward program for jurisdictions exceeding housing targets – and improving its implementation to meet the shortfall.
In New South Wales, addressing the shortfall of 185,000 homes could result in renters saving $130 weekly. Queensland renters could save $80 per week if the state’s projected shortfall of 96,000 homes is bridged.
For Victoria, closing the 71,000-home gap would cut rents by $50 weekly. Western Australia renters might save $100 weekly if the state overcomes its 56,000-home deficit. In South Australia, tackling the projected shortfall of 32,000 homes could reduce rents by $70 per week.
Nationwide, renters could collectively save $253m each week if the housing targets are met.
“2025 is the year for Australia to redouble our housing supply efforts with the urgency and commitment this crisis demands.
“Missing the target by 462,000 new homes by July 2029 would set off a housing affordability time bomb.
“Thankfully, we can avoid this. Ideally, hitting the targets will make housing more accessible and more affordable for millions of Australians.
“Boosting housing supply is the only long-term, sustainable way in which we can boost affordability of homes to buy and to rent.”
Mike Zorbas, Chief Executive, Property Council of Australia
To enhance the New Homes Bonus, the Property Council has suggested several measures. It proposes extending the program to seven years and making upfront payments available to support long-term reforms.
The Council also recommends increasing the scheme’s value to $6bn, while reserving any unspent funds for future housing initiatives. Lastly, it advocates for improved transparency through public reporting and the establishment of forums to encourage collaboration and share insights between jurisdictions.
“The scheme should be extended to seven years with upfront payments to support long-term reforms.
“Its value should increase to $6bn, with unspent funds reserved for future housing initiatives.
“That increase would be just 0.1% of the Australian Government’s 2024/25 Budget.
“We also need to improve the scheme’s transparency through public reporting and highlighting best practice to ensure accountability.
“The Property Council has called for incentives for two decades because they are vital to boosting housing supply.
“Our proposal will make sure this worthy scheme delivers on its promise.
“Three in ten dollars a buyer spends on a new home is governments’ taxes.
“Any Federal boost would need to be matched by changes to gouging state and territory tax regimes and planning systems to support the delivery of new homes.”
Mike Zorbas, Chief Executive, Property Council of Australia
Meeting the target would generate $128bn in economic activity and support 368,000 jobs, the report found. It could also moderate house price growth, with NSW home prices forecasted to decline by one per cent annually if the shortfall is addressed.
“These changes would ensure the New Homes Bonus supports housing affordability in Australia and fosters better coordination between all levels of government to address this challenge.”
Mike Zorbas, Chief Executive, Property Council of Australia
