Why Are Housing Prices Growing More Slowly in 2025?
Q: What is causing slower growth in housing prices in 2025?
A: According to the National Housing Supply and Affordability Council (NHSAC), the slower price growth is mainly due to Australia falling behind on its National Housing Accord construction targets, which has led to tight supply.
Q: What are the construction targets under the National Housing Accord?
A: The Accord aims to build 1.2 million homes by 2029. However, in 2024, only 177,000 dwellings were completed, compared to the 223,000 required.
Q: How many homes are now forecast to be built by 2029?
A: Even under the best conditions, only 938,000 homes are expected to be completed — well below the 1.2 million target.
Q: Is housing demand still growing?
A: No. Demand is moderating, with forecasts showing 205,000 new households in 2024–25, stabilising to around 175,000 per year from 2025–26.
Q: Will the new supply meet demand?
A: No. Once demolitions are factored in, only 825,000 net new homes will be added by 2029 — about 79,000 homes short of expected demand.
Q: How have property prices changed?
A: National prices rose 3.9% in 2024, down from 8.5% in 2023. In the year to March 2025:
- House prices increased by 3.7%
- Unit prices increased by 2.4%
Q: What is slowing construction?
A: Several key issues:
- A shortage of skilled workers
- Low productivity in construction
- Complex and slow planning approval systems
- High government taxes and charges (over 30% of new home costs)
Q: What does the Property Council of Australia say?
A: CEO Mike Zorbas called for urgent action, including:
- Streamlining building approvals
- Cutting excessive taxes and charges
- Increasing skilled migration
- Speeding up federal environmental approvals
Q: Which states are performing best and worst on housing targets?
- Victoria: Closest to its goal – expected to deliver 300,000 of 306,000
- Queensland: Will deliver 166,000 of 194,000 (79%)
- NSW: Only 251,000 of 376,000 (65%)
- Northern Territory: Worst performing – only 3,000 of 11,000 (31%)
Q: What is needed to fix the supply problem?
A: The NHSAC and PCA agree on the need to:
- Modernise planning systems
- Boost the construction workforce
- Remove barriers like foreign investment taxes and utility delays