Australia is falling further behind its ambitious housing construction target, with new figures showing the nation remains well short of the pace needed to deliver 1.2 million new homes by June 2029 under the National Housing Accord. The latest building activity data has intensified concerns about the country's ongoing housing shortage and affordability crisis.

The latest data from the Australian Bureau of Statistics (ABS) shows that builders commenced 48,012 new dwellings during the March 2026 quarter. While this represented a slight improvement compared with the same period a year earlier, it was around 6,000 fewer homes than in the previous quarter, indicating that housing construction has lost momentum.

Since the National Housing Accord began in mid-2024, Australia has consistently struggled to meet the annual construction pace required to achieve its target. Industry analysis indicates the country has started work on only about 197,000 homes over the past year, significantly below the annual target of 240,000 dwellings. To recover the shortfall and still meet the 2029 deadline, Australia would now need to build more than 260,000 homes every year for the remainder of the program.

Housing industry groups say several factors are slowing construction. Higher interest rates have increased borrowing costs for developers and home buyers, while ongoing labour shortages, rising construction expenses and supply chain pressures continue to affect building projects. Recent changes to investor tax settings, including reforms to negative gearing and capital gains tax, are also expected to reduce investor activity and further limit new housing development.

Economists note that while detached house construction remains relatively stable, apartment and higher-density developments have experienced more significant declines. This is particularly concerning because medium and high-density housing is considered essential for addressing shortages in Australia's largest cities, where population growth continues to outpace housing supply.

Industry leaders warn that unless policy settings improve and investment confidence returns, Australia's housing supply gap will continue to widen. The Housing Industry Association (HIA) and other industry organisations have called for measures to reduce development costs, improve planning approvals and increase the construction workforce. They argue that stronger support for new housing projects will be essential if the national target is to remain achievable.

The shortfall comes as rental vacancies remain historically low and housing affordability continues to deteriorate across much of the country. Population growth, strong migration and limited new housing supply have combined to place sustained pressure on both renters and prospective home buyers. Analysts believe increasing the pace of home construction is critical to easing long-term affordability challenges.

While governments continue to promote initiatives aimed at boosting housing supply, the latest ABS figures suggest Australia remains well behind schedule. Without a substantial increase in new dwelling commencements over the coming years, experts warn the National Housing Accord target is unlikely to be achieved by its planned completion date in 2029.