Albanese Government next to no chance of meeting much-touted housing target

The much-desired path to supplying 240,000 new dwellings a year across Australia is narrow.

But the federal government’s ambitious housing target will not be met without a bigger contribution from investors, according to research by Angie Zigomanis of Quantify Strategic Insights.

Comparison of the buyers the last time the target was achieved, in 2015, with the 2025 financial year suggests that while owner-occupiers are pulling their weight investors have stepped back sharply from buying.

And the emerging build-to-rent (BTR) sector is just getting started. Without re-engaging private investors and scaling up BTR, the target will remain aspirational rather than achievable, Zigomanis anticipates.

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Labor is little chance of making its much touted housing target. Picture: Mark Stewart / NewsWire

He says having achieved the target in 2015, the National Housing Accord goal of 1.2 million new dwellings over five years, or 240,000 new dwellings per annum, “appears achievable”. “However, once we dig into the data and compare the market then and now, the challenges become clear,” he says.

In 2015, the market peaked at 238,000 new dwelling building approvals, with an estimated purchaser mix of 118,000 owner occupiers, 84,000 local investors, and 36,000 overseas investors.

The FY2025 approvals slipped to 186,000 dwellings – 54,000 short of the government’s target. Zigomanis calculates the contribution from the owner-occupier segment increased slightly to about 119,000 approvals.

“However, the investor side almost halved,” he says.

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Angie Zigomanis of Quantify Strategic Insights

Local investors accounted for 51,000 approvals, and overseas investors just 11,700. The gap was only partly filled by almost 4000 BTR approvals.

“These numbers indicate that a larger contribution is needed from the investor side to meet the 240,000 target,” he says.

“However, this will be a challenge as baby boomers are moving to divestment mode and gen X and millennials are burdened by debt.

“Overseas investors have retreated in response to purchaser and owner surcharges, and are unlikely to fully recover.”

As local investors are the main “off-the-plan” buyers for apartments, without more investors achieving the infill targets of our major capital cities will be impossible.

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Home construction is well behind target. Picture: Mark Stewart / NewsWire

BTR activity may have to increase up to tenfold, to about 30,000 to 40,000 dwellings annually, to compensate for the shortfall in traditional investor activity, the report advises.

“BTR development is largely taking place in the premium market, with developers avoiding ‘market priced’ and affordable developments without further incentives,” it reports. But BTR has the potential to scale significantly as institutional investors are increasingly interested in residential property as a long-term asset.

Zigomanis concludes that hitting the government’s goal is not just about numbers, but balance.

“Australia needs a mix of housing types and tenure models that meet the needs of owners, renters, and the broader economy,” he says.

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