With predictions Australia will fall more than 460,000 homes short of a housing-crisis busting 1.2 million new homes target, a new report has tipped six-figure price growth.
The great Australian home dream is facing a six-figure hit as the nation looks set to drastically undershoot housing construction targets intended to improve affordability.
The Australian Property Market Outlook 2026-2030 released by independent buyer’s agency Propertybuyer today estimates the surge will occur as the nation falls as much as 462,000 homes short of housing construction targets intended to address the nation’s housing affordability crisis by significantly increasing supply.
Australia is working to build 1.2 million new homes by mid 2029 as part of the National Housing Accord, a federal government-led initiative.
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However, building approval and completion data more than a year on from the commencement of the program’s timeline shows it is still falling well short of targets, with just 193,000 approvals in the most recent 12-month period covered by Australian Bureau of Statistics data.
The new report projects that over the next five years an ongoing shortfall in new home construction will lead dwelling prices to surge about 30 per cent in Brisbane, Adelaide, Perth and Darwin.
Dwelling prices cover all homes, from apartments and units to townhouses.
That would see PropTrack’s median value for the Queensland capital rise from $1.013m to $1.317m by the end of 2031.
In Adelaide there would be an about $272,000 increase to $1.18m in the same timeline.
Perth’s would surge an additional $285,000 on top of today’s $950,000 typical dwelling value, and Darwin would gain about $173,000 to top $750,000.
Propertybuyer chief executive and founder Rich Harvey says Australians will see house prices surge six figures in major capitals as it falls short of building targets.
In Sydney, the $1.24m typical home would surge to $1.55m after a 25 per cent uptick. Though the report indicates the typical house price will rise even higher and surpass $2.22m.
Melbourne home values are tipped to gain just under $240,000 (28 per cent) to go from $854,000 to about $1.93m. The median house price for the Victorian capital could be $1.4m by the end of 2030.
Propertybuyer founder Rich Harvey said growth of 25-30 per cent in major capitals would exacerbate the divide between Aussie families that currently have and are able to hang onto property wealth, and those that are not.
Noting a first-home buyer surge alongside the expansion of the federal government’s 5 per cent deposit home buying scheme late last year, Mr Harvey said it was clear that people could see “the wave coming”.
A more than 460,000-home shortfall in new housing goals could have big cost impacts for families hoping to secure the Great Australian dream in five years’ time.
“The only way the buyers can go into these markets is with generational wealth,” he said.
While that would mean housing continued to be unaffordable, he said it was likely the bank of mum and dad would still continue to help home prices rise — leaving those without such support increasingly less likely to own a house.
The solution for many would be to turn to medium density, to look further away from major capitals or to become rentvesters — which could drive up prices for the affordable properties that are still available around the nation.
“The other response is generational living, a lot of people are buying housing with the ability to do a granny flat either for them to move into or for their kids to,” Mr Harvey said.
The buyer’s agent added that after drawing on data from the Australian Bureau of Statistics, Reserve Bank, Housing Industry Association and PropTrack it was clear less than 15 per cent of the nation’s statistical area level two regions, roughly equivalent with an average population of 10,000 people, were on track to reach their targets under the housing accord goals.
Mr Harvey’s analysis extends beyond initial projections from the Property Council last year and estimates an even larger shortfall on the National Housing Accord due to skills and developable land shortages, planning delays, construction cost hikes and insolvency risks for builders.
Surging population growth means future generations are increasingly less likely to live in a house, unless they have family support.
“Housing scarcity is now baked into the system,” he said.
“Migration and household formation continue to run ahead of new construction while capacity constraints are holding back development.
“Even if building activity accelerates, the gap will not close quickly. This has far-reaching implications for affordability, rents and investment.”
The upshot will be declining affordability, with particular knock on effects for renters as rising population outstrips available homes — especially in Brisbane, Perth and Adelaide where vacancy rates are critically low.
However, this also makes the three cities the best bet for property investors who should see the best conditions for possible growth in home values as well as rents.
Sydney will have the biggest dollar increase, and Melbourne will require policy setting changes from the Victorian government to keep up with other states.
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