Home Truths: Australia's housing crisis deepens as government falls 77,000 homes behind target

For decades, the formula was simple: work hard, buy a home, build a future. But for millions of Australians, that promise is now slipping further away than ever.

New housing target figures reveal the federal government’s ambitious goal to build 1.2 million new homes in five years is already 77,000 builds behind schedule, just 18 months in.

The shortfall now demands a record 266,000 homes per year to meet the goal, which analysts and industry experts say is dead on arrival.

“We’re building homes at about 30 per cent slower than what we need to,” the Housing Industry Association’s chief economist Tim Reardon warned.

The crisis is hitting Australians of all ages, from young people in their mid-20s desperate to move out of their parents’ home, to families entirely priced out of the market.

“It’s pretty clear that Australians see this as a crisis and it’s something that goes to our national identity and our sense of economic opportunity,” Grattan Institute economist Matthew Bowes said.

The numbers paint a stark picture. Between 1950 and 2000, the median house price sat at three-and-a-half times the average wage. That has since ballooned to what is now eight times an average wage.

Land prices have also surged 500 per cent since 2000.

Daniel Hendler, grandson and soon successor to property king Harry Triguboff at Meriton, Australia’s biggest residential developer, says heavy taxes and increasingly costly building codes have rendered many developments unfeasible.

“You could strip out about $50,000 per apartment if you just looked at reversing some of those building code changes,” Hendler said.

One third of the cost of an apartment is taxation.

With 27 million people and only 10 million homes, the supply simply isn’t enough to meet booming demand.

“Well certainly the Australian dream is changing,” Bowes said.

Smaller blocks, smaller houses, bigger mortgages have become the new reality.

Many Australians are being priced out of traditional houses altogether, forced to consider apartments instead.

“It is the growth in apartment stock that is going to need to at least double or triple if we’re to have any hope of meeting that pent up demand,” Reardon said.

Meriton, which has built 80,000 apartments and counting, offers one potential solution: lifting restrictions on land lease homes, where families buy just the house and lease the land from the government or developer, lowering the upfront cost by removing the land value.

Hendler said the government “could get a lot closer” to its housing target by changing policy settings.

But the chances of actually reaching it? Don’t put your house on it.

Home Truths is a six-part investigative series confronting Australia’s housing crisis head-on, starting Sunday at 6pm on Seven and 7plus.