Supply constraints remain one of the biggest challenges facing the property market, and new forecasts suggest the gap between demand and delivery may continue to widen.
The Master Builders Association has revised down its expectations for new home construction over the next five years. While building approvals are trending in the right direction, they are still falling short of what is required.
To meet the Federal Government’s Housing Accord targets, more than 85,000 approvals per year are needed through to 2029. Current projections indicate that benchmark is unlikely to be reached.
New South Wales is expected to be the most affected, potentially falling more than 100,000 homes short of its target. This highlights the uneven performance across states and the complexity of the issue.
The challenge isn’t just about approvals. It’s about capacity. The industry continues to face constraints across labour, materials, and land availability.
Master Builders has emphasised that simply setting targets is not enough. Real progress requires investment in the fundamentals that support construction.
This includes increasing the supply of shovel-ready land, expanding the skilled workforce, supporting apprenticeships, and reducing regulatory bottlenecks that slow down projects.
External factors are also adding pressure. Ongoing conflict in the Middle East is expected to push construction costs higher, particularly through increased fuel prices and supply chain disruptions.
Rising costs have a direct impact on feasibility. As projects become more expensive to deliver, fewer are likely to proceed. That, in turn, further constrains supply.
Delays caused by material shortages or transport disruptions can also have a compounding effect. When projects are pushed back, it creates a backlog that takes time to clear.
The broader implication is clear. If supply cannot keep pace with demand, upward pressure on prices is likely to continue.
For buyers and investors, this environment reinforces the importance of acting decisively. Waiting for supply to catch up may not be a viable strategy in the near term.
Understanding these constraints helps provide context to current market conditions. It also highlights why well-located, established properties continue to perform strongly.
