The Housing Industry Association (HIA) called on the Australian government to recalibrate its housing affordability initiatives, contending that the contours of the National Housing Accord create a trajectory that will not meet the nation’s pressing demand for affordable accommodation.
Launched in the preceding year, the Accord commits to the production of 1.2 million new dwellings over a fiveyear horizon, commencing July 2024 delivery in the first year has already fallen behind in 2025. The Accord has garnered general acclaim as a constructive element in the nation’s strategy for alleviating housing strain, yet the sector’s leaders argue that its design privileges private housing tenure to the detriment of a demonstrable increase in affordable and social options.
Affordable Housing: A Marginal 0.83 Per Cent
According to Treasury’s most recent release, the Accord’s provision will culminate in 9,962 dwellings categorised as affordable housing in Australia , translating to a marginal 0.83 per cent of the overarching target.
A jurisdictional breakdown indicates the following allocations:
New South Wales: 3,100
Victoria: 2,546
Queensland: 2,049
Western Australia: 1,076
South Australia: 700
Tasmania: 220
Australian Capital Territory: 175
Northern Territory: 96
In a subsequent agreement, the nation’s state and territory administrations pledged to supplement the Accord with an additional 10,000 affordable dwellings. Nevertheless, the HIA asserted that, even in aggregation, these dwellings will not alter the Accord’s trajectory as a sizeable yet insufficient component of the housing programme as a whole. Government has since announced $1.5b Housing Support Program, $3b New Homes Bonus, and $1.7b infrastructure funding for councils to unlock approvals in 2025. Australia risks a shortfall of 462,000 homes by 2029, pushing prices and rents higher.
HIA: Private Sector Must Drive Supply
Jocelyn Martin, Managing Director of HIA, cautioned that the federal housing strategy risks minimising the essential contribution of the private market in mitigating affordability strain.
“While social and affordable housing is indispensable for Australians locked out of home ownership, and while we back the nationwide scaleup of that supply, it remains a narrow segment of the housing continuum,” Ms Martin stated. “For the government’s goal of 1.2 million dwellings to gain traction, most of that intake must consist of privately built, private market stock. Only in that way can we exert downward pressure on both sale and rental prices.”
Her assessment mirrors a rising chorus of sector leaders who argue that current policy settings heavily weighted toward incentives for community housing run the danger of sidelining the broader private production engine that has historically absorbed supply gaps and mitigated price inflation.
Demand for Agenda Expansion
The HIA is now calling on the newly sworn Minister for Housing, Clare O’Neil, to recalibrate the housing policy framework and incorporate measures that galvanise supply across the full spectrum of the market.
“The more we expand the overall housing stock, the greater the opportunities for existing households to vacate social housing rental, thereby allowing more vulnerable households to benefit from the stock that remains. This expansion, in turn, raises the prospects for moderate-income Australians to obtain home ownership at prices that do not overextend their budgets,” Ms Martin remarked.
“The present moment calls for renewed, decisive leadership. Ministers Clare O’Neil and Prime Minister Anthony Albanese need to recalibrate the national housing policy framework such that the imperative of supply across the full spectrum of tenure takes precedence. The existing policy parameters albeit well intentioned remain too circumscribed, thereby sidestepping the structural drivers that future-proof housing availability for ensuing generations.”
Consequences for Buyers and Investors
If affordable housing allocations remain restricted, first-home buyers will increasingly confront the necessity to compete head-to-head in the private financing arena. This reality intensifies the relevance of serviceability calculations, loan preapproval dynamics, and robust borrowing methodologies.
Investor sentiment is equally vigilant. With capital values and rental yields intrinsically linked to the availability of housing supply, portfolios are now undergoing stress testing against revised borrowing heuristics. The Reserve Bank has now cut the cash rate three times in 2025 lowering it by a total of 75 basis points to 3.60%, the lowest in two years. underscores how adjustments to cost-of-funds trajectories can redistribute both risk and opportunity along the spectrum of buyers and investors.
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