AUSTRALIA is expected to build more homes over the next two years, but the nation remains on track to fall 186,000 properties short of its national housing target, according to new industry forecasts.
The Housing Industry Association is forecasting the number of homes commencing construction will continue to increase through 2027 and 2028, despite warning recent taxation and investment policy changes will slow the recovery.
The forecast is contained in HIA’s latest Economic and Industry Outlook, which examines new home construction and renovation activity nationally and across all eight states and territories.
HIA Chief Economist Tim Reardon said underlying demand for housing remained strong enough to drive further construction, but argued Australia would build fewer homes than would have been possible under previous policy settings.
“Despite recent changes to housing taxation and investment settings, HIA expects the number of homes commencing construction to continue to rise in both 2027 and 2028, albeit, slower than would have occurred,” Mr Reardon said.
HIA expects Australia to fall about 186,000 homes short of the National Housing Accord ambition of delivering 1.2 million new, well-located homes over five years.
The industry body argues changes affecting taxation of established housing, together with the prohibition on self-managed superannuation funds borrowing to invest in residential property, have removed investment from a construction recovery that was already gathering momentum.
Mr Reardon said those policies were unlikely to cause housing commencements to fall nationally but would limit the scale of the expected increase.
Mr Reardon also cautioned against interpreting an increase in construction starts as evidence Australia’s housing shortage was coming to an end.
