Despite land being zoned for housing, new research shows infrastructure gaps and approvals are preventing thousands of homes from being built.
Australia is on track to fall more than 380,000 homes short of its National Housing Accord target because of infrastructure gaps, environmental approvals and planning delays, according to a new report from the Urban Development Institute of Australia (UDIA).
Around 40% of residentially zoned land is not ready for development due to infrastructure, environmental and planning constraints. Picture: Getty
Now in its fourth year and released this week as an assessment of land supply and dwelling delivery for governments and policymakers, the National Housing Pipeline (NHP) report found around 40% of residentially zoned land across Australia’s major cities is currently not development‑ready due to these constraints.
With governments aiming to deliver 1.2 million new homes under the National Housing Accord by mid‑2029, the report warns of a widening gap between what is planned and what can actually be built.
Zoned land doesn’t always mean homes
A central finding of the NHP is that not all residential-zoned land is capable of delivering housing in the near term.
While land may be approved for residential use, many sites cannot proceed because they lack basic enabling infrastructure such as water, sewer and roads, or are waiting on environmental or planning approvals.
UDIA national president Oscar Stanley told realestate.com.au the data showed how widespread those constraints had become.
“Essentially almost half of the land that’s identified for growth can’t be developed,” he said.
To address these constraints, UDIA believes that enabling infrastructure could be a central focus for governments. It is already an area of attention in some states, including Queensland through its Residential Activation Fund.
“Infrastructure is the easiest win because it can be activated quickly and benefit many,” Mr Stanley said.
Mr Stanley pointed to the federal government’s agreement with South Australia under the 100,000 First Home Buyers Program as an example of how infrastructure funding can unlock stalled supply.
It’s the first deal under the $10 billion dollar program first announced as an election promise in 2025.
“But the only state that’s got the deal done is South Australia,” Mr Stanley said.
“The rest of the states need to play catch up to get their piece of the pie.”
How fuel prices are adding pressure to housing supply
The release of the report comes as rising fuel costs, linked to conflict in the Middle East, add further pressure to construction costs across the country.
According to UDIA, the effect on construction is already playing out.
“We’re seeing an initial impact, there’s no doubt,” Mr Stanley said.
UDIA noted greenfield locations can be an important lever to pull for unlocking housing supply. Picture: Getty
But he said the bigger issue for the industry currently is economic uncertainty, particularly given the fixed‑price nature of most building and civil construction contracts.
“What’s the price going to be in six months’ time to build a home?” he said.
“There’s going to be an immediate impact on margin because there’s stuff that’s under construction now costing more than what the builder or civil contractor thought.
“The government's got a very important role here to ensure that there's confidence for customers to be able to proceed. [This will] keep builders building and keep civil contractors working to deliver the land we need.”
The supply levers governments can pull now
Mr Stanley said governments need to better align housing targets with what can realistically be delivered in the current market.
He said greenfield housing remains the fastest and lowest‑cost way to lift supply in the short term.
“The quickest and most affordable way for us to build houses in the current environment is in the greenfields,” Mr Stanley said.
“The densification of our cities has to be nailed, but what we’re finding is the affordability issues around the feasibility of these multi‑unit projects makes it very difficult for them to be a volume housing solution.
“We need all housing typologies working but we just know that the volume and the lowest cost base that we can do as an industry is in greenfield locations.”
He also noted the federal government, along with housing minister Clare O’Neil, had been actively engaging with the NHP’s findings, with the report being used to inform and prioritise infrastructure investment across states and territories.
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