It started as a bold plan to fix Australia’s housing crisis — but now, the numbers aren’t adding up. The Albanese government’s pledge to build 1.2 million new homes by mid-2029 has run into financial and logistical trouble, and experts say it may be time to rethink what’s realistic.
Cost of the Housing Target Soars
According to Treasury figures, the cost of the federal government’s Housing Australia initiative has ballooned by $3.8 billion in less than a year. The program, designed to help meet the national housing target, is now expected to cost $15.2 billion over the next four years — up from the $11.4 billion forecast in last May’s budget.
Treasury attributed the surge to “reprofiling” and changes in how funds are distributed, but the higher price tag has reignited debate about whether the government’s goal is achievable. Both Treasurer Jim Chalmers and Housing Minister Clare O’Neil have stood by the commitment, insisting that the 1.2 million homes target remains on track.
Yet leading developers, economists, and industry groups are increasingly sceptical.
Experts Warn of “Unrealistic” Housing Goals
Developers across the country argue that the current target is unlikely to be met without sweeping reforms. Rising construction costs, worker shortages, and planning bottlenecks are all slowing progress, reports The Australian. Industry veteran Mark Steinert, formerly of Stockland, has pointed to elevated material prices, productivity issues, and union pressures as major obstacles.
Other developers, like Don O’Rorke of Consolidated Property, have called for a total rethink of how success is defined — suggesting the focus shift from raw housing numbers to affordability and workplace productivity. Experts warn that unless planning laws are relaxed, skilled migration expanded, and land supply increased, Australia risks repeating the mistakes seen in Canada, New Zealand, and the UK, where ambitious housing promises have consistently fallen short.
A Global Problem, Local Pressures
The Reserve Bank of Australia has also expressed doubts about short-term progress, noting that new supply is unlikely to ease the housing crunch over the next two years. Meanwhile, the Productivity Commission has urged the government to expand skilled migration to fill gaps in the construction sector.
The Housing Industry Association says the country is still well behind the pace needed to reach 1.2 million new dwellings by 2029. To stay on track, around 240,000 homes would need to be built each year — far above the current rate.
A Warning From History
Around the world, housing targets have become political minefields. Programs in Canada, the United States, and New Zealand have failed to meet expectations, hampered by the same mix of costs, regulation, and labour shortages now facing Australia. If Labor’s plan is to succeed, experts say it will require not just funding but structural reform — and a willingness to rethink how Australia defines “affordable housing” in the years ahead.
