A national plan to build 1m new homes before the end of the decade will be announced in the federal budget as part of a historic agreement between governments, investors and the construction sector.
The treasurer, Jim Chalmers, will announce the national housing accord during Tuesday’s budget, which will include the target of building 1m “well-located” and energy-efficient homes in five years, starting from 2024.
The budget will include $350m in additional federal funding for the construction of 10,000 affordable homes over the five-year period, while state and territory governments have committed to building to 10,000.
Chalmers said this was on top of the $10bn Housing Australia Future Fund, promised by Labor before the May election to build 30,000 new social and affordable housing properties in five years.
“We want more Australians to know the security of decent housing and more Australians realising the aspiration of homeownership,” he said in a joint statement with the housing minister, Julie Collins.
“It’s more important than ever that we work together to ensure there is an adequate supply of affordable housing where it is needed – close to jobs, transport and other services.”
Chalmers said the accord, signed by federal, state and local governments, as well as institutional investors – including superannuation funds – and the residential development, building and construction sectors, recognised the majority of housing supply “needs to come from the market”.
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Government, he said, would play a “key role in enabling and kickstarting investment”.
“Relative to comparable countries, Australia has a low level of institutional investment in housing,” the accord reads.
“At the same time, we have the world’s third-largest pool of capital in our superannuation system, which is hungry for investments that will deliver stable returns over the long term for the benefit of members.”
The Treasurer’s Investor Roundtable, a forum established earlier this month involving the government, the chief executives of the nation’s big four banks and the heads of the largest superannuation and investment funds, will meet in November to discuss private investment in housing.
The accord also details short- and long-term actions to address supply problems, including by improving zoning and planning regulations and releasing state and Commonwealth-owned land for social and affordable housing.
According to the Australian Bureau of Statistics, about 985,000 new homes were built over the five years to March 2022, though the majority were completed before 2018-19.
Since then, home completion rates have been declining, largely due to rising labour and material costs, with an estimated 174,000 homes built in 2021-22.
Treasury forecasts there will be about 180,000 housing completions on average across the next three financial years, which is consistent with estimates from the Master Builders Australia and the Housing Industry Association.
Last month, the Productivity Commission described the private rental market as “the epicentre” of the nation’s housing affordability problem and recommended state and territory governments commit to firm targets for new housing supply.
In 2020, the Victorian government announced a $5.3bn “big housing build” to fund 12,000 new social and affordable homes in four years.
Earlier this year, it announced a levy on developers to fund 1,700 new social and affordable homes each year after the end of the big build, but it was scrapped within days after opposition from industry groups.
It is also hoping to increase homeownership in the state by tripling the size of its Victorian Homebuyer Fund to $1.1bn. The fund allows homebuyers to purchase with a 5% deposit, with the government providing up to 25% of the purchase price of the home.
Homebuyers can then buy out the government’s share at market value over time, with payments reinvested to help others enter the property market.
The Queensland government, meanwhile, recently announced $2bn to deliver 13,000 social and affordable homes by 2027. It is understood the announcement is separate to its commitment under the accord.