HIA urges government action on planning, infrastructure, and tax barriers
Australia’s home building approvals continue to trend upwards, but housing industry experts warn the gains won’t be enough without major structural reform to meet the federal target of 1.2 million new homes over five years.
Fresh data from the Australian Bureau of Statistics (ABS) for February 2025 shows detached house and multi-unit approvals improving across several states and territories.
“Home building activity across a number of Australian markets was already improving heading into 2025,” said Thomas Devitt (pictured above), senior economist at the Housing Industry Association.
“The RBA’s February rate cut will provide a welcome extra boost, but structural reforms are needed to properly address Australia’s housing affordability crisis.”
Despite the rebound, Devitt warned that challenges remain — especially for medium- and high-density housing. Activity in this segment remains well below target, held back by labour shortages, high financing costs, and government charges and regulations.
“Medium-to-high density housing activity, in particular, has been around just half its required volumes over the last year,” Devitt said. “This has funnelled improving market conditions back into the detached housing sector, but housing of all types needs to contribute to the Australian government’s target of 1.2 million new homes over five years.”
ABS data showed that building approvals totalled just 171,394 last year – 29% below the 240,000 approvals required annually to meet the government’s goal of constructing 1.2 million homes by 2029.
Devitt said any serious attempt to solve the housing crisis must include reforms across multiple areas — migration, tax policy, planning systems, and infrastructure.
“Reforms are required across multiple policy fronts, including skilled migration, tax, regulation, planning, approvals, land supply and infrastructure provision,” Devitt said.
The HIA has previously called for a $12 billion commitment in the federal budget to fund infrastructure that would unlock land and support new supply.
In the lead-up to the 2025 federal election, HIA is also pushing for government action to remove policy and regulatory obstacles that continue to limit new housing supply.
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