Australia needs to build 240,000 new homes annually to meet demand, but only 180,000 were completed in the past year, falling well below the government’s commitment to build 1.2 million homes over five years, according to HIA.
HIA Managing Director Jocelyn Martin said the situation has reached critical levels.
“We are simply not building enough homes to keep up with demand,” Ms Martin said.
Not only is this shortfall driving up prices, worsening affordability, and placing enormous pressure on renters and families across the country but also means we are set to fall well below the Government’s commitment.”
The industry body has identified several key barriers to increasing housing supply that need to be urgently addressed.
“Taxation policies are playing a major role in driving up costs,” Ms Martin said.
“Taxes now account for up to 50 per cent of the cost of a new home in most major cities.
“Immediate reforms are needed to remove inefficiencies like stamp duty cascading onto GST, which unfairly inflate housing prices and make affordability even harder to achieve.”
She said infrastructure limitations are also creating significant bottlenecks in development, while supply also remains a critical issue, with numerous housing projects unable to proceed due to inadequate infrastructure support.
The HIA is calling for immediate federal investment in essential services, including roads and water supply.
Ms Martin said there is a need for bipartisan cooperation to address these challenges.
“In the coming weeks and months, we will be asking both sides to stop politicising housing and consider the pressing challenges confronting Australians and the building industry,” she said.
The recognition of construction industry skill shortages and recent infrastructure announcements have been positive steps, but the HIA maintains that more comprehensive action is needed to address structural issues in the housing industry.
Tax reform has been identified as a crucial area for change, with the HIA particularly concerned about inefficiencies like stamp duty cascading onto GST, which they say artificially inflates housing prices.
“In 2025 we ask all political parties to be outraged over the status quo and be bold, be courageous and prioritise initiatives which directly improve housing supply,” Ms Martin said.
“Let’s build the homes Australians need and ensure everyone has a place to call home.”
