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The National Housing Supply and Affordability Council (NHSAC) released its first report on 25 March 2026.

Whereas the National Housing Accord with the state and territories set it sights on constructing 1.2 million homes over 5 years to June 2029 at an average rate of 240,000 a year, we achieved only 219,000 in the first 5 quarters since the accord began. Annualised, this represents a shortfall of 65,000 homes per year. That’s not good.

So, there we are as to ‘supply‘.

What about ‘affordability‘?

Well, it’s entirely arguable that even if we were to meet the annual target of 240,000 new homes every year for the next 5 years, we can’t assume that prices will decline. Why would they? Are developers likely to build a glut of homes? Surely, builders are unlikey to drop their asking prices and take a loss. Wouldn’t they hold properties until they achieve their price, or not construct homes at all?

Developers need to acquire sites at currently highly-inflated land prices. ABS data shows that the average land component of a home in Australia is now more than 80% of its cost, so what have state governments been doing to reduce their land prices? Nothing, nothing at all.

There are recent indications that Melbourne land values have declined slightly as many landlords facing higher land tax bills in Victoria than in other states, have begun to sell their investment properties. However, this appears to be more an accidental outcome of Victoria raising taxes to address its high level of debt, rather than a direct policy to achieve lower land prices.

In the absence of a general increase in state land taxes, I wish NHSAC the best of luck in achieving their targets – particularly on affordability. They certainly need an enormous amount of luck!