The National Housing Supply and Affordability Council’s inaugural annual report is calling for an Australian housing system that is more responsive to changes in demand and the needs of the community.
The ‘State of the Housing System 2024’ annual report, presented to the Hon Julie Collins MP Minister for Housing and released today, sets out the Council’s approach to improving Australia’s housing landscape.
The report presents an overview of the state and functioning of Australia’s housing system and assesses demand and supply conditions and how these factors influence dwelling prices and rents. The report reviews housing affordability in Australia across tenure, age and income groups, and focuses on vulnerable cohorts of people. The report also presents modelling and analysis that project the supply of new dwellings and the formation of new households over the next 6 years.
The Council proposes 10 focus areas for improving Australia’s housing system: adequate investment in social housing; reducing homelessness; improving rental market outcomes for tenants; improving efficiency in the land use and planning systems; boosting capacity in the construction sector; improving data availability; addressing regional‑specific housing challenges; improving First Nations housing outcomes; reviewing the suitability of the national housing target; and ensuring Australia’s taxation system supports supply and affordability.
Chair of the Council, Ms Susan Lloyd‑Hurwitz, said: “There is no denying the housing crisis we are in. It is a longstanding crisis, fundamentally driven by the failure to deliver enough housing of all types – from social housing through to market home ownership. The problems in our housing market are deep seated and there is no easy fix. Building a better system will require focussed, coordinated and consistent effort over the long run across all jurisdictions.”
“At its heart, this crisis is about insufficient supply, but many contributing factors are making it more acute – the resumption of migration at pace, rising interest rates, skills shortages, elevated construction company insolvencies, weak consumer confidence and cost inflation to name just a few.”
“These all combine to create an environment in which prices and rents are growing faster than wages, rental vacancies are near all‑time lows, 169,000 households are on public housing waiting lists, 122,000 people are experiencing homelessness and projected housing supply is very low.”
Analysis presented in the report shows housing affordability worsened in 2023, from already challenging levels. The Council’s projections indicate that housing affordability could worsen further in the near term, with a significant shortfall of new supply relative to new demand in the 2023–24 financial year, followed by a further shortfall in new supply in the 2024–25 and 2025–26 financial years. Based on historical data, only a small proportion of this new supply would be affordable.
The Council’s forecasting model predicts by 2028–29 new supply will still be 39,000 dwellings short of new demand. The model predicts new builds (minus demolitions) of 1,040,000 and new demand of 1,079,000.
Ms Lloyd‑Hurwitz said: “These shortfalls in new market supply relative to new demand will add to the already significant undersupply of housing in the system.”
The report calls for more supply to meet future new demand and address the significant unmet demand for housing currently in the system.
“The Australian Government’s 1.2 million national housing supply target agreed to in the National Housing Accord is suitably ambitious and clearly focuses attention on improving supply,” said Ms Lloyd‑Hurwitz.
“However, the Council’s forecasts indicate the 1.2 million target will not be achieved. Implementation of announced housing policy measures to increase the supply of new housing is required.”
The report also describes how the housing system will need to adapt to emerging trends, including climate change, an ageing population and increasing numbers of people with disability. Fostering innovation and new sources of financing offer some solutions to supply challenges.
“More Australians are facing homelessness and housing insecurity, and the number of people experiencing homelessness continues to rise,” said Ms Lloyd‑Hurwitz. “Australia’s housing system is not working for many First Nations people. Without targeted measures, First Nations Australians will continue to be over‑represented in poor housing outcomes.”
The Council worked to ensure that the report reflects a broad understanding of the Australian housing system which was made possible by the generous input received from stakeholders, including the Australian, state and territory governments and their agencies; planning, residential construction and development peak bodies and entities; the community housing sector; and research institutions.
The report is available on the Council’s website: nhsac.gov.au
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