1.2 million homes by 2029? Here’s why we’re falling behind

The Housing Accord’s big promise is slipping. Here’s what you need to know in 60 seconds.

1. Everyone’s talking about it: We’re two years into the plan to build 1.2 million homes, and we’ve built about 356,000. That leaves us roughly 124,000 short of where we should be by now.

2. How we got here: In July 2024, federal, state and territory governments agreed to build 1.2 million well-located homes in five years. Right now, not a single state or territory is on track.

3. Why you should care: Fewer homes mean higher rents and higher prices. Renters already pay a record share of their income, and first-home buyers now face an even longer wait to get a foot in the door.

4. Two sides of the story: Supporters say a big, bold target forces governments to cut red tape. Critics say it ignores soaring costs and worker shortages, and that more homes don’t automatically mean affordable homes.

5. The fix: We need faster approvals, more tradies, better infrastructure and smarter building methods such as prefab. Builders would have to finish more than 240,000 homes a year from here, about a third faster than today.

6. What could derail it: Interest rates are at 4.6% and could rise again. Building costs are up because of the Middle East conflict, and many projects don’t stack up financially. The industry body UDIA warns the shortfall could reach 310,000 homes.

7. What happens next: The official forecast now says we’ll hit 1.2 million in late 2030, about 18 months late. Watch the next quarterly progress report and the Reserve Bank’s November rate decision.

The bottom line: The target isn’t dead, but it’s on life support, and every rate rise makes the job harder.