‘Significant uplift needed’: The home building shortfall Australia needs to meet 

A new report has revealed the country’s supply of new homes is near its lowest level in a decade.  

In its annual State of the Housing System 2025 report, the government-backed National Housing Supply and Affordability Council said 177,000 new homes were completed in 2024, falling behind the demand which was estimated to be 223,000 for the same period. 

These completions were near the lowest supply of new homes in about a decade.  

The report, now in its second iteration, details Australia’s current housing demand, affordability conditions and what is expected to come over the coming years.  

It also outlines the country’s supply in relation to the National Housing Accord target, which is to build 1.2 million new, well-located homes from 1 July 2024 until 30 June 2029. 

According to the council’s latest figures, the nation is set to fall short on that goal, with 938,000 new homes predicted to be built over the five-year period.  

This means, the country will have a 262,000 shortfall – with no state or territory anticipated to meet its share of the target.   

177,000 homes were completed in 2024, falling behind the demand of 223,000 for the same period. Picture: Getty

“The Australian housing system remains far from healthy and is continuing to experience immense pressure,” Chair of the council Susan Lloyd-Hurwitz said.  

“The nation is still very much in the grips of a housing crisis that has been decades in the making through our persistent failure to deliver enough homes to meet demand.”  

Despite the gap, the council says the National Housing Accord target of 1.2 million homes “remains suitable”.   

“The target is rightfully ambitious, highlighting the magnitude of the community’s challenges; communicating government policy intentions; galvanising and focusing effort across governments, industry and the community sector; and facilitating transparency, accountability and performance assessment,” the report outlined.   

“Such a target should exceed expected demand to address the significant unmet demand for housing already in the system, including for people experiencing homelessness and to offset the effect of demolitions.”  

The council forecasts underlying demand will be for 904,000 dwellings over the Housing Accord period, and with 113,000 dwellings expected to be demolished, at least 1.017 million new homes are needed to simply keep pace with demand.  

According to the council, the target of 1.2 million new homes is consistent with these principles, as it currently exceeds current projected supply by around 28%, and projected demand plus demolitions by around 18%.  

What can the industry do?  

The report noted that significant system-wide reform, government support measures and industry innovation are needed to improve the housing system.   

According to the council, five key policies should be prioritised:  

  • Increase social and affordable housing 
  • Improve construction capacity and productivity 
  • Reform planning systems 
  • Provide further support for renters  
  • Ensure Australia’s taxation system supports housing supply and affordability. 

Within these five areas, the council makes 15 policy recommendations.  

According to analysis, 938,000 new homes are predicted to be built over the five-year National Housing Accord period. Picture: Getty

“A significant uplift is needed to support Australians who depend on social and affordable housing for shelter and as a foundation for building their lives and participating in their communities,” Ms Lloyd-Hurwitz said.  

“The council acknowledges the work underway across the housing spectrum, including work undertaken by states and territories to enhance planning systems. Our collective focus needs to remain on consistent and coordinated effort.”  

The NSW government responded to the report by noting its role in reaching the target – including the Transport-Oriented Development program, which is set to deliver 231,855 homes.  

NSW minister for planning and public spaces Paul Scully said given the costs of construction and economic pressures, it was never going to be easy to make up deficits through mid-2029.   

“Planning approvals are 15% faster today than they were in March 2023, the number of applications lodged is up 28% on the same time last year, and NSW has the most homes under construction in the country,” Mr Scully said. 

“There are thousands more homes and DAs being finalised that are embracing our planning reforms such as the Housing Delivery Authority and the Low and Mid-Rise policy. We’re building a pipeline that will actually deliver homes. 

“The State of the Housing System report shows us that we have our work cut out for us, but as a government we’ve got our priorities right.” 

Are you interested in buying and building new? Check out our New Homes section. 

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Buyers uncover a modern lifestyle between the harbour and ocean in Manly

With its laidback coastal lifestyle, stunning beaches and vibrant village atmosphere, Manly has long been one of Sydney’s most coveted seaside suburbs.

Now, a rare opportunity awaits homebuyers and investors alike with the arrival of Two Tides – a boutique new development from Time & Place ideally positioned between Manly’s iconic surf beach and serene harbourfront.

Offering a harmonious blend of coastal charm and urban convenience, Two Tides captures the essence of modern beachside living in one of the city’s most sought-after enclaves.

Evan Papadopoulos, Director of Time & Place, says locals love Manly because it balances the best of both worlds.

“It’s tucked between the harbour and the ocean so you’re constantly surrounded by water and relaxed coastal energy,” he says.

“But it’s more than just the stunning location – it’s the tight-knit, creative community that genuinely embraces both the artistic spirit and the beach lifestyle that really sets Manly apart.”

Manly’s enduring appeal is reflected in its steady market performance, with unit prices increasing by 12.5% over the past year according to realestate.com.au data.

Two Tides by Time & Place offers buyers luxury living in the laidback beach-side suburb of Manly.

Architectural elegance meets everyday comfort

Two Tides is a boutique five-storey development offering a collection of 24 luxury apartments designed by renowned Sydney architects SJB.

The development features a mix of two- and three-bedroom residences, each thoughtfully crafted with spacious layouts and high-end finishes.

Emily Wombwell, director of SJB, says their aim was to embed Manly’s unique essence into the daily experience for residents, blurring the lines between outside and in.

“From the moment you step outside your front door, you’re immersed in a sense of place, with open breezeways drawing the ocean air in and carefully constructed sightlines connecting you to the landscape beyond,” she says.

Amenities at Two Tides, including the central landscaped Tidal Garden and lush arrival lobby, have been thoughtfully included to elevate the everyday experience for residents.

“The Tidal Garden isn’t just a beautiful space – it’s a place to pause, reset and reconnect with nature without ever leaving home,” Papadopoulos says.

“It offers that rare sense of tranquillity right in the middle of the village buzz, giving residents a peaceful retreat whenever they need it.

“It’s little touches like this that turn a home into a sanctuary.”

Meanwhile, the lobby has been designed to welcome residents into a world of quiet, natural luxury.
Charlotte Wilson, interiors senior associate at SJB, describes the architecture here as calm and grounded.

“Generous gates open into the sculpted lobby where lush planting is framed by soft, rendered forms,” she says.

“The architecture then gently lifts you, drawing you upward through an immersive terracotta stairway to the shared Tidal Garden oasis – an Australiana-inspired landscape at the heart of the address, with every home entry oriented inward, toward greenery and connection.

“It’s a place that feels both considered and rare.”

With lush planting and natural forms, Two Tides is a calming oasis in a village environment.

Spaces that breathe, flow and endure

At Two Tides, the apartments are shaped by a design philosophy that centres on human-focused experience, freedom, space, movement and air.

“There’s a beautiful rhythm to how each home unfolds, with indoor and outdoor spaces blending so effortlessly that the boundary between them almost disappears,” Wilson says.

A dedicated space to hang coats and drop keys is just one example of the careful attention paid to the everyday rituals of living.”

Generous balconies have also been included to provide real outdoor living.

“What matters most to us is creating homes that support us through life – spaces that nurture wellbeing and are built to last,” Wilson says.

“Longevity is at the heart of the design, with every material and detail thoughtfully chosen for its sustainability, quality and enduring beauty.”

The residences feature premium details and finishes, perfect for discerning buyers.

A sanctuary from the everyday rush

Catering to modern lifestyles, Two Tides has been designed to provide a tranquil ambience and private sanctuary feel for residents.

“Life is moving faster than ever, and people are realising just how important it is to have a home that feels like a true escape from all the hustle and bustle,” Papadopoulos says.

“There’s something incredibly powerful about coming home to a space where you can really unwind.

“Somewhere secure, private and low maintenance, where you don’t have to think about anything except relaxing and recharging.

“It’s about creating a lifestyle that’s centred around ease, comfort and wellbeing, rather than constant busyness.”

With its thoughtful design, prime coastal location and strong market demand, Two Tides represents a rare opportunity to secure a contemporary home in one of Sydney’s most tightly held beachside communities.

Interested buyers are encouraged to book an appointment at the display suite to explore the residences firsthand and get a feel for the lifestyle on offer.

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‘Hectic’ bidding war pushes Hampton East home $268k over reserve

Five eager bidders fought it out for the keys to this spacious, modern Hampton East home.

A bidding war in Melbourne’s southeast has left jaws on the footpath, with five buyers pushing this sleek townhouse almost $300,000 past reserve.

More than 120 people packed into 21A Lonsdale Ave, Hampton East, to witness a “high-stakes auction” — a modern three-bedroom townhouse that ultimately sold under the hammer for $1.538m.

Ray White Chelsea director Shane O’Sughrue said the auction “went off like a firecracker” and left him nearly speechless.

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“There were bids flying. It was hectic,” Mr O’Sughre said.

“My sellers are speechless.

“They’re upsizing locally and just couldn’t believe the result.”

The auction opened at $1.17m — the bottom of the price guide — and quickly escalated in $20,000 and $30,000 jumps.

A wide timber hallway sets the tone with warmth, flow and clean architectural lines from the outset.

With three living zones across 30sq m, the home delivers room to relax, entertain or work.

Once the bidding hit the mid-$1.4m range, the increments narrowed to $10,000, then $2,000, and finally $1,000 as two buyers went head-to-head in a nailbiting finish.

Mr O’Sughrue said confidence in the market was rising fast, especially ahead of an expected interest rate cut.

“There’s a sense of urgency building out there,” he said.

The expansive open-plan living zone connects effortlessly with the kitchen and decked alfresco for everyday ease.

A stone waterfall island, mirrored splashback and premium appliances headline the entertainer’s kitchen.

“Buyers aren’t waiting anymore.

“ They’re getting aggressive and jumping in before competition gets even stronger.”

The home itself had plenty of pulling power, about 30sq m in total with three distinct living zones, a high-end kitchen featuring a stone waterfall island and seamless indoor-outdoor area leading out to a covered timber deck.

An electric fireplace, ducted climate control and quality finishes provide year-round comfort with style.

The bold facade, secure electric gate and contemporary design give this townhouse standout street appeal.

The Ray White Chelsea director said the home has a great flow.

“You’ve got the space, security with the electric gate, and finishes that are mid to high calibre for the area,” Mr O’Sughrue said.

“It appealed to families, professionals, downsizers, a really broad market.”

A covered timber deck offers the perfect private setting for outdoor dining or relaxing in peace.

The result comes as listings remain tight across Melbourne’s bayside suburbs, with well-presented homes continuing to draw big crowds and strong offers.

Mr O’Sughrue also urged sellers not to sit back and wait for spring.

“Now’s the moment,” he said.

Spa retreat inspired finishes and elegant fixtures add a touch of hotel-style luxury to the home’s wet areas.

The luxe main bathroom features a freestanding tub, floor-to-ceiling tiling and twin stone vanities.

“You don’t want to be competing with everyone else in three months’ time.

“The buyers are here, they’re ready, and if your home’s priced right, it’ll fly.”

Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.

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david.bonaddio@news.com.au

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Shame list: 72 Aussie banks refuse RBA’s rate cut in May 2025

ANALYSIS

One bank played the role of villain in February, when it refused to pass on much-needed rate relief to customers. But on Tuesday, Virgin Money changed its tune, announcing it would pass on the RBA’s May rate cut in full.

Failure to pass on all, or any of a 25 basis point cut by the central bank would have left both Virgin Money and BOQS customers forking out 0.5 per cent more money in interest to their bank than they would be if those banks followed the lead of most of the 110 other lenders on comparison website Finder’s books and passed on the savings in full.

But Bank of Queensland, who owns Virgin Money and BOQS, was quick to confirm both lenders would pass on this cut in full, along with Bank of Queensland itself and other subsidiary ME Bank. BOQ Business Bank would also be passing on the cut, a media spokesperson said.

It means Virgin Money avoids the dreaded ‘shame list’ of banks that drag their feet on passing on cuts by the RBA.

SEE THE SHAME LIST OF BANKS YET TO PASS ON THE MAY CUT BELOW

RATES

RBA Governor Michele Bullock left rates on hold in April, but May was a different story. Picture: Nikki Short

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On an average Aussie loan of just above $600,000, a single rate cut of 0.25 per cent will save about $1200 a year. A double rate cut will save $2400 a year.

Those savings increase significantly for the vast number of Aussies with higher mortgage balances than the average.

Back in February, media representatives from Bank of Queensland, which owns Virgin Money and BOQS, told me that while BOQ and ME Bank were passing on rates in full, the two subsidiary lenders would not because their offerings were “aligned to the market” and had previously been cheaper than the market.

That struck me as odd considering Virgin Money’s best variable rate was at 6.44 per cent, which until Tuesday’s decision was higher than all bar seven of the 111 lenders on Finder’s radar.

I’m not sure which market they were referring to at the time.

Their customers agreed, taking to their social media pages to vent.

“Currently negotiating a new deal with another bank. You’ll have lost home loan and credit cards with us because of the greed,” posted Kelly Schuppe at the time.

I’ve approached them again this time to ask if they will consider passing on. No response as of yet, but it will be interesting to see how they justify it if they are again planning not to cut.

Finder’s head of consumer research Graham Cooke said there was a chance that not as many lenders would pass on the next rate cut in full.

“Historically, banks haven’t always passed on RBA rate cuts in full, especially during periods when their profit margins are squeezed,” Cooke said.

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Finder head of consumer research Graham Cooke.

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“However, particularly with the recent rate cuts, there has been strong societal pressure for the major banks to pass on the full 25 basis point cut to their variable home loan customers, often driven by public pressure and competition.”

Indeed, NAB wasted no time, announcing at 2.31pm it would pass on the full 0.25 per cent cut to customers as of Friday, 30 May. CBA, ANZ and Westpac quickly followed suit, each passing on the cut in full.

“The competitive landscape among lenders plays a significant role. If one major bank passes on the full cut, others are often pressured to do the same to avoid losing customers,” Cooke said.

“Even if the full cut isn’t passed on by your current lender, the competitive environment means there will likely be better deals available elsewhere. This makes refinancing crucial for homeowners looking to maximise their savings.

“A reduction of even half a per cent can be the difference of thousands of dollars a year.

“Shop around to find a variable home loan that offers a lower interest rate than your current provider. The very lowest rates now have a ‘5’ in front of them.”

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Banking Generics

Major banks rushed to pass on the first rate cut. Picture: Damian Shaw

With that in mind, here is the full list of lenders on Finder’s books and their best variable rate.

We will update this each day with the new rates from banks that do pass on cuts.

Banks who have cut, new best rate (%), effective date

ANZ: 5.59- 30 May

CommBank: 5.59- 30 May

NAB: 5.94- 30 May

Westpac: 5.59- 3 June

AMP: 5.64- 2 June

Athena: 5.74- 20 May

Australian Mutual Bank: 5.19- 1 June

Bank Australia: 5.63- 2 June

Bank of Melbourne: 5.79- 3 June

BankSA: 5.79- 3 Jun

BankVic: 5.48- 3 June

Bankwest: 5.69- 30 May

Bendigo Bank: 5.64- 6 June

BOQ: 5.63- 6 June

Firefighters Mutual Bank: 5.49- 1 June

Greater Bank: 5.49- 30 May

Great Southern Bank: 5.64- 3 June

Heritage Bank: 5.49- 30 May

Homeloans: 5.89- 11 June

HomeStar Finance: 5.49- 16 June

HSBC: 5.49- 2 June

ING: 5.64- 3 June

Macquarie Bank: 5.64- 23 May

ME: 5.63- 7 June

Newcastle Permanent: 5.49- 30 May

People’s Choice Credit Union: 5.39- 30 May

Pepper Money: 6.04- 5 June

Qudos Bank: 5.44- 29 May

RACQ Bank: 5.39- 3 June

RESIMAC Financial Services: 5.89- 11 June

Southern Cross Credit Union: 5.73- 1 June

St.George: 5.79- 3 June

Suncorp: 5.65- 30 May

Teachers Mutual Bank: 5.49- 1 June

The Mutual Bank: 5.49- TBC

Ubank: 5.59- 29 May

UniBank: 5.49- 1 June

Unloan: 5.49- 20 May

Virgin Money: 6.19- 6 June

Shame list: Banks yet to cut

Adelaide Bank: 6.04

Arab Bank Australia: 5.7

Aussie: 5.89

Australian Military Bank: 5.89

Australian Unity: 5.79

AusWide Bank: 5.84

Bank First: 5.74

Bank of China: 5.68

Bank of Sydney: 5.79

Bank of us: 5.89

Bank Orange: 5.69

BankWAW: 5.54

bcu: 5.74

Beyond Bank: 5.89

Bluestone: 6.79

Border Bank: 5.59

Broken Hill Bank: 6.64

Cairns Bank: 5.99

Central Murray Credit Union: 6.99

Central West Credit Union: 6.04

Coastline Credit Union: 6.69

Community First Bank: 5.74

Credit Union SA: 5.74

Defence Bank: 5.84

Dnister: 5.79

Easy Street: 5.84

Family First Credit Union: 5.7

Fire Service Credit Union: 5.84

First Option Bank: 5.74

Firstmac: 6.03

Freedom Lend: 5.9

G&C Mutual Bank: 5.74

Gateway Bank: 5.7

Geelong Bank: 5.89

Goulburn Murray Credit Union: 5.94

Horizon Bank: 5.64

Hume Bank: 5.74

Illawarra Credit Union: 5.74

IMB: 5.79

La Trobe: 6.54

Laboratories Credit Union: 5.95

Liberty Financial: 6.24

loans.com.au: 5.74

Mortgage House: 5.64

MOVE Bank: 5.69

MyState Bank: 5.79

NICU: 5.74

NRMA Insurance Home Loan: 5.78

P&N Bank: 5.88

Pacific Mortgage Group: 5.64

Police Bank: 5.59

Police Credit Union: 5.74

Qantas Money: 5.93

QBank: 5.74

Queensland Country Bank: 5.74

Reduce: 5.74

Regional Australia Bank: 5.69

resi: 6.14

South West Slopes Bank: 5.95

Sucasa: 6.05

Summerland Bank: 5.59

The Capricornian: 5.64

The Mac: 5.67

Tiimely Home: 5.79

Transport Mutual Credit Union: 6.69

Unity Bank: 5.74

Up Home Loan: 5.75

Warwick Credit Union: 6.14

Well Money: 5.81

Woolworths Team Bank: 6.34

Yard: 6.14

Yellow Brick Road: 6.64

MORE: Finder’s full list of lenders and their updated rates here

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Transform your real estate career with this one simple skill

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The driving forces behind mortgage lenders moving away from third-party processors

Mortgage lenders and services today face significant operational challenges, especially when relying on third-party processors for their outsourced services. While these middlemen operators can streamline certain tasks, the benefits are outweighed by their extreme high costs as well as the limitations over operational controls. Here we will focus on the complexities involved with outsourcing, and an understanding of the growing trend of direct servicing to maintain control and reduce costs. 

First, let’s understand the role of outsourcing, which has become common practice among many mortgage lenders to help manage the complexity and volume of tasks associated with escrow services and payment processing. Unfortunately, the use of third-party processors can lead to a lack of transparency and flexibility. In fact, when lenders utilize outsourcing, they often become dependent upon third-party systems, and this can be problematic for complex tasks when direct oversight is imperative. As many as 39% of lenders today rely on a third party to manage their escrow servicing1.

Understanding the costs involved

High costs are a major issue. Third-party processors often charge substantial fees for their services, which can significantly impact the lender’s bottom line. One major player in the outsourcing industry charges between $50 and $80 per mortgage for their services, depending on the complexity and location of the mortgage. Ultimately, these costs begin to add up quickly and erode profitability, especially for lenders managing large portfolios. 

According to a recent industry survey, 40% of mortgage lenders say rising operational costs represent the biggest challenges they face in managing escrow-related payments for property taxes1.

What’s more, outsourcing limits a lender’s control over their entire operations. When this happens, they lose direct oversight of the process. This lack of control can lead to inefficiencies and many errors, as the third-party processor may not have the same level of commitment to the lender’s specific needs and goals. The lender may also find it challenging to cancel or modify the outsourcing agreement, which further limits their flexibility.

The dependency of third-party processors can also limit transparency of processes and systems used for operations. This lack of transparency can make it difficult for lenders to fully monitor and manage their operations effectively, leading to potential issues with compliance and customer satisfaction.

Forty-one percent of lenders today say they are challenged by customization limitations with their current escrow management tools or platforms through third parties, and 42% say high costs are also a challenge1.

A renewed look at direct servicing

As a result of these challenges, limitations, and risks, mortgage lenders have been increasingly turning to more direct servicing to maintain control and reduce costs. Direct servicing allows lenders to manage their operations internally, providing greater transparency and flexibility. When they handle escrow services and payments internally, lenders ensure that their processes align with specific needs and goals, leading to more efficient and accurate operations.

Furthermore, direct servicing allows lenders to quickly adapt to changing market conditions. In today’s highly volatile economic climate, flexibility is extremely important for maintaining profitability and operational efficiency. Through direct servicing, lenders are able to respond more swiftly to changes in regulations, market trends, and also customer demands, and this helps ensure a more resilient operational environment.

Of those lenders benefitting from direct servicing, the majority (35%) point to automation tools as the biggest cost-saving measures they’ve implemented for escrow management over the past twelve months1.

Given the volatile threat of current Presidential Tariffs, this is certainly important. Tariffs are set to increase the cost of imported goods and materials, which can have a direct impact on the mortgage industry. When lenders can reduce reliance on third-party services, they can better manage their expenses and mitigate the overall financial impact of tariffs.

With all this in mind, remaining competitive in today’s business climate has never been more important for mortgage lenders, especially as the industry continues to be defined by rapid changes and intense competition. With rapidly changing regulations, shifting interest rates and consumer expectations, lenders need to be agile and innovative to remain ahead.  

With a direct servicing model, lenders can reduce costs and maintain control over their operations while having the flexibility to respond to changing market dynamics. Through the use of today’s automation technology that optimizes internal processes, lenders can enhance their service offerings, improve customer satisfaction, and further differentiate themselves from competitors. By taking this proactive approach lenders will build a stronger market presence and ensure long-term success in a highly competitive and volatile environment.

Steven Pals is Director of Business Development at Autoagent.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the editor responsible for this piece: zeb@hwmedia.com.

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