Australia's Housing Challenge Isn't Planning. It's Delivery.

Australia doesn't have a shortage of housing targets. It has a shortage of completed homes.

The National Housing Accord aims to deliver 1.2 million new homes by 2029. Yet recent forecasts suggest Australia may complete only around 980,000 homes during the Accord period, leaving an estimated shortfall of approximately 220,000 dwellings.

The conversation around housing often focuses on planning reform, rezoning and density. While these initiatives are important, they only create development capacity. Capacity alone does not create homes.

From an investment perspective, the critical question is not where housing can be built, but whether projects can be delivered.

The scale of the challenge is significant.

Residential construction costs now average approximately $475,000 per dwelling. At that level, delivering 1.2 million homes would require more than $570 billions of construction expenditure before accounting for land acquisition, infrastructure, financing and holding costs.

At the same time, Australia continues to face elevated construction costs, labour shortages and funding constraints. According to ABS data, residential building approvals and housing commencements remain below the levels required to achieve the National Housing Accord target, despite continued population growth and strong underlying housing demand.

We are also seeing an increasing focus on infill and transit-oriented development in established suburbs. Projects such as the proposed Edgecliff-Woollahra Precinct in Sydney, targeting around 9,400 new homes, demonstrate how governments are attempting to increase supply where infrastructure, employment and transport already exist.

But even where planning capacity exists, successful housing delivery ultimately depends on five factors:

• Planning certainty and efficient approvals 

• Enabling infrastructure investment 

• Construction and labour capacity 

• Project feasibility 

• Access to capital 

As real estate investors and lenders, we see this firsthand. Planning reform can create opportunity, but projects are only delivered when developers can access the capital required to move from approval to completion.

Australia's housing challenge is increasingly a delivery challenge, and capital will play a critical role in determining whether housing targets become completed homes.

Housing targets create capacity. Capital and execution create supply.