The National Housing Accord is great news for property investors

An examination of the Australian National Housing Accord and what it means for property investment.

The Federal Government has committed to building 1.2 million homes in five years but based on current construction levels, we’re well behind meaning strong returns are expected to continue for property investors.  

The ongoing and persistent imbalance between the demand for housing and the rate of new construction, is creating a substantial opportunity for property investors.

The size of the problem has now been recognised by the Federal Government with the National Housing Accord. 

The Accord was agreed upon by the Commonwealth and state and territory governments as well as other stakeholders and aims to deliver 1.2 million properties over five years before 2030. 

This ambitious target underscores the severity of the supply shortage and is an acknowledgment of the significant deficit which is now understood to be structural and long-term, not just the product of a market cycle. 

A key aspect of the Accord is its reliance on the private sector to deliver 97% of the much-needed new homes. 

To this end, the Federal Government is providing $3.5 billion in incentives to states and territories to exceed the targets and launch new land release initiatives. This implicitly creates an environment where private investment is not just welcomed but actively sought.

The National Housing Accord also highlights ongoing efforts to improve planning and zoning, promote medium and high-density housing, and streamline approval pathways to address barriers to supply. These measures are working to make it easier and faster for property developers to bring new supply to the market. 

But there has been a persistent gap between the number of required new housing starts to fill the gap and the actual number of properties started. 

For Australia to meet the 1.2 million new homes target set by the government, we need to build 240,000 homes a year. 

However, the latest available figures from March 2025, show that while there have been some modest increases in the number of housing starts compared to the previous year there were just 47,645 dwellings started, which is significantly below the 60,000 per quarter required. 

Annually, the target is 240,000 new homes per year and according to Housing Industry Association (HIA) forecasts,  

the current rate of housing starts clearly indicates that Australia is falling significantly behind the 1.2 million homes target, and we’re likely to only commence 983,530 new homes over the five year Accord period. 

The low figures are attributed to persistent challenges like high construction costs, skilled labour shortages, and difficulties in securing financing for developers. These are structural issues that cannot be resolved quickly, meaning the undersupply is likely to persist for years.

However, with strong net overseas migration continuing into 2025 the demand side of the equation is relentless, while supply struggles to catch up.

All of this is great news for property investors because the lack of supply guarantees high demand for rental properties which in turn supports low vacancy rates and strong rental yields. 

Meanwhile the fundamental shortage of housing provides a strong underpinning for continued property value appreciation and capital growth, particularly in desirable locations.

Smart investors will look for opportunities to acquire well-located properties that meet the ongoing demand from renters, capitalising on the sustained imbalance in the Australian housing market.

Ready to capitalise on Australia's housing shortage and build your wealth through property investment? Schedule a discovery call with the Oli Property team. 

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