Construction is already tens of thousands of homes behind schedule after the first full year of the national housing target.
Federal targets to build more than one million homes in five years are more than 60,000 properties behind schedule after the first 12 months.
The latest building activity figures released on Wednesday by the Australian Bureau of Statistics reveal construction started on just more than 179,000 homes in the 2024/25 financial year.
The figures were the first full year as part of the national housing accord target of building 1.2 million properties by 2029.
In order for the figure to be reached, 240,000 properties would need to be built each year.
Peak bodies warn the target could fall short by 200,000 homes at the end of the five-year period.
Housing Industry Association chief economist Tim Reardon said the past year showed an underperformance in the sector, with a significant amount of work to do to catch up.
“There has been substantial policy reform this year that will improve the supply of new homes,” he said.
“These reforms will take time before they deliver new homes, and much more needs to be achieved.
“Despite these new initiatives, home building remains too expensive with onerous taxes, fees and charges incurred in delivering new homes to market.
“Policymakers must reduce the taxes, costs and restrictions on home builders, home buyers and home investors if they want to see the kind of construction volumes Australia need.”
Master Builders Australia chief executive Denita Wawn said there was a lot of room for improvement in the construction figures.
“The building and construction industry is ready to deliver, however government needs to hand them the tools to lift productivity,” she said.
“Accelerating approvals, streamlining regulation, addressing skill shortages, and supporting private investment will give industry the certainty to get projects moving.”
The most recent figures for the June quarter show 45,156 homes began construction during the period.
There was a 9.2 per cent increase in the number of homes that began construction during the quarter compared with the same time in 2024.
However, there was a drop of 4.4 per cent from the March quarter to June quarter in the current year.
The number of detached homes that began construction dropped by 6.4 per cent in June, the weakest quarter since March 2024.
Opposition Leader Sussan Ley said the figures were proof more needed to be done to address housing shortfalls.
“You hear the promises, you see the big numbers but the reality is far from that. Labor is building excuses, not building houses,” she said.
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