The government is 11,000 homes behind target. Should Australia be worried?

When the federal government announced the National Housing Accord, it committed to building 240,000 new homes each year – or 20,000 new homes each month – starting from July 2024. 

But two months into the National Housing Accord, the federal government “has yet to meet a single National Housing Accord target”, according to the Institute of Public Affairs (IPA). 

Over August, just 13,991 new dwellings were approved across Australia, according to Australian Bureau of Statistics data.

This is a 6.1 per cent dip from the 14,797 dwellings that were approved in July. 

Since the National Housing Accord began two months ago, Australia has fallen over 11,000 homes short of the cumulative target, equivalent to a 30 per cent shortfall. 

IPA deputy executive director Daniel Wild stated: “It is very hard for mainstream Australians to have confidence in the federal government’s plan if in its first two months it has failed to reach anywhere near the targets of new dwellings proposed.” 

But is it all bad news? 

A closer look at the ABS data reveals that while overall dwelling approvals may have declined, approvals for detached houses actually rose. 

The shortfall was mostly driven by a decline in high-density apartment approvals over August. 

“House approvals in the three months to August 2024 were 11.2 per cent higher compared to the same time in the previous year,” said Tim Reardon, chief economist of the Housing Industry Association (HIA). 

In his opinion, market confidence in new home building has actually “strengthened in recent months” as Australia continues to recover from the post-COVID construction slump.