Housing Reality Check: Can We Build 1.2 Million Homes?

If you’ve been thinking about building or buying a new home, you’ve probably heard big promises from governments about “more housing supply” and “fixing the crisis”.

One of the biggest of those promises is the National Housing Accord – an agreement between the Commonwealth, the states and territories, local government and industry to help deliver 1.2 million new, well-located homes over five years from mid-2024 to mid-2029.

On paper, that sounds great. More homes should mean less pressure on rents, more choice for buyers, and maybe a bit less stress at auction.

But there’s a very practical question sitting underneath that target:

Do we actually have enough people to build that many homes, to Australian standards, in that time frame?

That’s the question the Housing Workforce Capacity Study 2025, prepared by BuildSkills Australia, sets out to answer.

What the Study Says

The Study looks specifically at the residential construction workforce – the people and firms involved in building houses, town houses and units across Australia.

It compares two future realities:

A baseline future, where the housing market trundles along roughly as expected; and
A Housing Accord future, where we actually achieve the 1.2 million-home target.

The difference between those two futures tells us how many extra workers would be needed to make the Accord happen.

Their modelling suggests that:

By 2029, delivering the Accord’s extra homes would require about 23.8% more labour in residential construction than the baseline path.
In headcount terms, that’s an extra 116,700 workers on top of what the system would normally produce by then – around 139,300 extra workers in total compared to today.

In other words, to hit the housing target, the country would need roughly a quarter more people working on residential construction than we’re currently on track to have.

The report is careful to say this isn’t a “labour shortage” in the technical sense

– it’s a mobilisation challenge

The workforce exists across the economy; the question is whether enough of those people can be attracted, trained and shifted into residential work quickly enough to deliver the homes.

Why This Matters to You

It’s easy to read those numbers and think:

“That’s the government's problem.”

But if you’re planning a build or a renovation, it’s also your problem. Here's why:

A tight workforce directly affects:

Time – how long it takes to start your job, get trades on site, and reach each stage.
Cost – what builders and trades charge, how they price risk, and how often they push for variations.
Quality – how much supervision is available, how experienced the people doing the work are, and how closely the build sticks to the National Construction Code (NCC) and relevant Australian Standards (AS).
Risk – of delays, corners being cut, defects, disputes and, in the worst case, builder failure.

When labour is tight, it becomes harder for builders to:

Keep experienced supervisors across all jobs.
Say “no” to work when they’re already stretched.
Take the time needed to properly coordinate trades, inspections and compliance checks.

From a homeowner’s point of view, that can show up as:

Slipping practical completion dates and frequent “we’re still waiting on X trade” updates.
Last-minute rescheduling and gaps between trades.
Work being done by less experienced people with limited supervision.
More reliance on you accepting “near enough” instead of insisting on NCC- and AS-compliant work.

None of this is guaranteed to happen on your project, but the Study makes it clear that the pressure is real at a national level.

Australia’s Housing Shortage

If you only read the headlines, you’d think Australia’s housing mess is mostly about “too many people coming in and not enough houses going up”.

The reality painted in the Housing Workforce Capacity Study is a bit more nuanced – and a lot more useful if you’re trying to make sense of what’s happening to rents, prices and build times.

Let’s strip it back to basics.

Vacancy rates: the warning light on the dashboard

One of the simplest ways to see if there are enough homes is the rental vacancy rate – the percentage of rental properties that are sitting empty and available.

Broadly speaking:

A vacancy rate around 2.5–3% is usually considered “balanced”.
When it drops towards 1%, it means almost everything is occupied and renters are scrambling for whatever is left.

According to the Study, Australia’s vacancy rate has dropped from roughly that balanced level to around 1% over recent years. That’s a big move. It lines up with what many people have experienced on the ground:

Dozens of applicants at inspections.
Rents jumping faster than wages.
People staying in unsafe or unsuitable housing because there’s nowhere else to go.

For homeowners and prospective builders, that low vacancy rate is the backdrop to everything:

It helps explain why demand for new homes is so high.
It’s part of the justification for the 1.2 million-home target under the National Housing Accord.
And it hints at how stubborn the problem might be – because the cause isn’t just “too many people arrived last year”.

It’s not just immigration: household size quietly shrank

A key point in the Study is that the housing squeeze started tightening before population growth took off again.

During the pandemic:

Net overseas migration slowed dramatically in the short term.
But the number of households still grew faster than the number of dwellings.

How does that happen?

The main driver was shrinking household size – put simply, fewer people per dwelling.

Think about some of the changes we saw:

Young adults moving out of share houses or the family home to get more space.
Relationships ending under the stress of lock downs, creating two households where there used to be one.
Older parents moving out of multi-generational households to reduce health risks.

Even if the total number of people in the country doesn’t change much, if more of them want to live separately, you need more dwellings to house them.

The Study also points out that this isn’t a totally new trend:

Household size in Australia has been drifting down for decades as families have fewer children, people live longer, and more people live alone.
The pandemic accelerated that pattern. Some of those changes will reverse over time, but not all of them.

We have more households competing for housing than we used to, and that’s unlikely to fully unwind.

So even if migration policy zig-zags, the underlying pressure for more dwellings per head of population is still there.

Construction bottlenecks: dwellings delayed, not just demanded

The Study doesn’t just look at demand; it also looks at how many homes we’ve actually been delivering.

A few important points:

For a while, approvals and commencements (the projects getting started) looked OK on paper.
But projects were taking longer to complete because of:
- Trade shortages and labour constraints.
- Material shortages and price spikes.
- Weather disruptions in some regions.
- Builders struggling with fixed-price contracts signed before costs blew out.

The end result: the flow of finished, ready-to-live-in dwellings was slower than expected.

So instead of the pipeline smoothing things out, it got clogged. That made the vacancy rate fall even further, because households were forming faster than completed homes were arriving at the end of the construction pipeline.

This is where the workforce angle really bites:

If there aren’t enough skilled people to keep jobs moving, even a “healthy” number of approvals won’t translate into actual places to live.
For you as a client, that can show up as projects that sit “almost finished” for months because one or two key trades can’t be scheduled.

Short-term shock vs long-term pattern

The Study’s message is that we’re dealing with a mix of:

Short-term shocks
- Pandemic disruptions.
- Sudden changes in where and how people wanted to live.
- Sharp jumps in material costs.

and

Long-term patterns
- Smaller households over time.
- An ageing population.
- Steady demand for well-located homes near jobs, transport and services.

This distinction matters:

If the problem was only a short-term shock, you might expect the market to mostly “self-correct” once borders reopen, rates rise, or people adjust.
But because it’s layered on top of long-term structural trends, the Study argues that Australia needs a permanently higher level of new dwelling supply to keep things in balance.

That’s one reason why governments have gone for a big, multi-year target like 1.2 million homes, rather than a one-off “housing stimulus” for a year or two.

More homes, not just more policies

The blunt conclusion from the Study is:

In the long run, the only durable way to improve affordability and reduce pressure is to add more dwellings.
That means consistently delivering more homes each year than we’ve been used to, not just hitting a one-off spike.

Of course, that still leaves a lot of questions:

Who’s going to build them?
Where will they be located?
Will they actually be liveable, compliant and decent quality?
How do we avoid making the same mistakes we’ve seen in some rapid-build apartment booms?
If we import people from outside of the country to help increase housing supply, where will they stay and wont they just add to the housing shortfall?

Those questions are where workforce capacity, planning systems, financing and builder behaviour all collide – and they’re what the rest of the Study tries to unpack.

From a home owner’s perspective, though, the foundation is simple:

The housing shortage is real, and it isn’t going away quickly. It’s being driven by how we live, not just how many people arrive each year.

That’s the context in which you’re planning your build, renovation or purchase.

The National Housing Accord – Ambition vs Reality

In simple terms, the National Housing Accord is an agreement between the Commonwealth, states and territories, local government and industry that says:

Over five years from mid-2024 to mid-2029,
Australia will aim to build 1.2 million new, well-located homes.

“Well-located” is doing a lot of work there – the idea is not just to build on the fringes, but to put more homes closer to jobs, transport, schools and services. That’s the theory.

For everyday people, it’s meant to:

Ease rental pressure over time.
Give more first-home buyers a shot at owning.
Support construction jobs and industry activity.

That’s the ambition. But the workforce study asks a blunt question:

Can the sector actually deliver that many homes that quickly?

The numbers: from 43,000 to 60,000 homes per quarter

Right now, our development and construction sector delivers about 43,000 completed dwellings every quarter (every three months) on average.

To hit 1.2 million homes over five years, the Accord implies:

Lifting that delivery rate to roughly 60,000 dwellings per quarter,
And keeping it there until 2029.

So we’re not talking about a small bump. We’re talking about:

An increase of around 17,000 extra completed homes every quarter,
Which is roughly a 40% uplift on current output.

Every three months, for five years

That’s like asking an already busy builder to suddenly take on 40% more jobs, without dropping standards, and hold that level for years – except at national scale.

“We’ve done big booms before”… but this one is different

The Study points out that big uplifts in building activity aren’t unheard of. During the 2016–2018 apartment boom, Australia hit very high completion levels, especially in the big cities.

So in one sense, aiming for 60,000 completions per quarter is not completely out of the blue – we’ve seen similar numbers before.

But there are some important differences between then and now:

Type of product
- The earlier boom leaned heavily on high-density apartments in certain markets.
- The Accord target covers a broader mix of housing types and locations, including more infill, town houses and detached homes.
Cost environment
- In the last big boom, construction costs were rising, but not like the post-COVID spikes we’ve seen.
- Since 2020, material prices and labour costs have jumped and then settled at a higher base level. That means today’s “normal” is already more expensive.
Interest rates and buyers
- Higher interest rates and broader cost-of-living pressure mean fewer people can easily afford new builds or off-the-plan purchases.
- Developers are more cautious about launching projects if they’re not sure they can sell the end product at a price that covers higher build costs.
Industry fatigue
- Builders and trades have just come through several years of chaos: price spikes, supply shortages, weather events, labour churn and a wave of insolvencies.
- Asking that same ecosystem to now ramp up and hold a very high output level for five years is not as simple as flicking a switch.

So yes, we’ve been near that 60,000-per-quarter sort of level before, but the context this time is far less forgiving.

Workforce is one of several choke points

The Housing Workforce Capacity Study is about skills and labour, so it rightly highlights workforce as a major constraint.

But it also acknowledges that labour is not the only bottleneck. Other constraints include:

Construction costs and margins
- Materials and labour are more expensive than pre-pandemic.
- Many builders are wary of fixed-price contracts after seeing colleagues wiped out when costs moved against them.
- If builders can’t price in a reasonable margin, they either don’t tender, or they go in too low and hope for the best – which is bad news for quality and solvency.
Financing and risk appetite
- Banks and financiers are more cautious after multiple builder collapses.
- Developers may struggle to get projects off the ground if pre-sales are weak or cost estimates are volatile.
Planning and approvals
- Even if the workforce existed, planning schemes, rezoning processes, infrastructure contributions and local objections can slow or block projects.
- Delays at this stage push projects back, which can make the original numbers unworkable by the time approval is granted.
Infrastructure capacity
- Roads, water, sewer, power and schools all need to keep up.
- If infrastructure lags, even well-intentioned housing targets can stall.

The point isn’t to say the target is pointless. It’s to recognise that hitting 1.2 million homes is like pushing on several levers at once:

Workforce (the main focus of this Study)
Planning and land
Finance and risk
Infrastructure delivery

If any one of those is badly out of sync, the whole thing slows down.

So… is the target realistic?

The Study doesn’t give a simple yes or no, because that would be dishonest.

Instead, it:

Accepts the 1.2 million-home target as a policy aspiration.
Works backwards to estimate what that means for workforce numbers and training systems.
Shows that, to get there, Australia would need to:
- Lift completions from about 43,000 to 60,000 per quarter;
- Increase residential construction labour demand by nearly a quarter by 2029;
- And support that with changes in apprenticeships, women’s participation, migration, productivity and training capacity.

From a home owner’s point of view, the important message isn’t “yes, we’ll definitely hit it” or “no, we definitely won’t”.

The important message is:

National targets are set well above what the system normally delivers, and the workforce is being asked to stretch significantly to meet them.

When a system is stretched, small problems in time, cost or coordination can snowball.

Why this matters for your new build

Big national targets might seem remote from your contract, but they flow through in very practical ways:

Builders may over-commit.
In a hot market with ambitious targets and grants or incentives flying around, some builders sign up for more work than they can comfortably manage, hoping to grow into it.
Good trades become harder to book.
If more projects chase roughly the same pool of skilled workers, high-quality trades can pick and choose jobs – and charge more.
Program dates get rubbery.
When every job is “urgent”, schedulers end up fire fighting. Your slab pour, frame stage, fit-off or PCI can all slide if the right people aren’t free on the right days.
Supervision gets stretched.
Site supervisors might find themselves juggling too many projects. That increases the risk that defects or non-compliant work slip through, only to show up later as leaks, cracking, movement, or performance issues.
Variation behaviour changes.
In a tight labour and cost environment, some builders lean harder on variations and provisional sums to claw back margin. You may see more claims that “this wasn’t included” or “this is additional”.

Where Could Extra Workers Come From?

The Study doesn’t just say “we’re short 116,700 people” and stop there. It looks at where those extra workers might realistically come from, and how big a contribution each avenue could make.

It focuses on five big levers:

Apprenticeships
Women in construction
Immigration
Productivity and innovation
Training system capacity

None of these on their own are enough. The whole point is that we’ll need a mix.

Apprenticeships – the traditional pipeline

Most of the trades that matter for houses – carpenters, bricklayers, plumbers, sparkies, plasterers – still rely heavily on apprenticeships as the main entry pathway.

The Study notes that:

There are already a lot of apprentices in the system.
The real problem is completion, not just sign-ups.

If we could lift completion rates towards the best levels we’ve managed in the past, the modelling suggests we could gain on the order of tens of thousands of extra qualified trades by 2029.

For you as a client, that means:

You will see more apprentices on site, not fewer.
The key issue is supervision – are they being properly overseen by experienced trades and site supervisors, or left to figure things out alone?

Women in construction – a big untapped pool

Women are still hugely under-represented in hands-on construction roles and site supervision.

The Study points to barriers like:

Poor site culture and behaviour.
Lack of flexible work arrangements.
Limited support for mid-career women who want to switch into trades.

It also shows that if participation among women increased meaningfully, it could add another big chunk of workers to the residential labour force.

For home owners, the important bit isn’t the politics; it’s simple:

A more diverse workforce means more people available to do the work.
Builders who are serious about respectful, safe workplaces often run better organised sites in general.

Immigration – bringing in skills from overseas

Construction already uses migrant labour, but the Study suggests immigrants are under-represented in residential construction compared to their presence in the wider workforce.

It highlights obstacles for small and medium builders:

Visa processes are complex and costly.
Many residential builders are too small to sponsor directly.

One of the ideas floated is to let accredited intermediaries sponsor workers and place them across many small firms, similar to how some health roles are handled.

If done well, this could add tens of thousands of workers. But it only helps if:

Migrant workers are properly licensed,
Paid under the correct Awards, and
Supervised so that work still meets the NCC and Australian Standards.

Your focus shouldn’t be on where someone was born; it should be on whether they’re qualified and supervised.

Productivity and innovation – doing more with the same people

The Study also looks at productivity – getting more output from each worker without just making them work longer hours.

It suggests that even a modest 5% productivity gain across the sector could be like adding around 30,000 extra workers, without actually growing headcount.

What does that look like in practice?

More offsite or prefabricated components (wall frames, pods, trusses).
Better scheduling so trades aren’t waiting around or tripping over each other.
Cleaner, clearer designs and details that reduce rework and mistakes.

Of course, this only works if:

Designs and systems are properly engineered and documented.
Work still complies with the NCC and relevant AS (e.g. AS 1684 for framing, AS 2870 for slabs and footings).

For you, it means that a builder who talks sensibly about systems, sequencing and checking is more valuable than one who just boasts about speed.

Training system capacity – can TAFE and RTOs cope?

All of the above depends on a training system that can handle more people and different kinds of learners:

School leavers,
Career-changers,
Women entering trades,
Migrant workers needing local up-skilling.

The Study notes that TAFEs and private RTOs will need the funding, trainers and facilities to deliver that extra training at decent quality. If they can’t, the workforce gap doesn’t close, no matter how good the policies look on paper.

From a client’s viewpoint, you don’t see this directly. But it shows up indirectly in how many competent, ticketed people are available to work on your job.

Reading Between Two Ferns: Assumptions, Biases and Limits

The Housing Workforce Capacity Study is serious work. But like any report, it has a lens – and it helps to know what that is.

Who wrote it, and why that matters

The Study is produced by BuildSkills Australia, a Jobs and Skills Council. Their job is to:

Analyse workforce trends,
Advise government on skills and training policy,
Look at how to get enough people with the right skills into key industries.

So it’s no surprise the report:

Focuses heavily on training, apprenticeships, migration policy and participation, and
Says less about things like builder solvency, contractual behaviour, supervision quality, or consumer protections.

That’s not “bad”; it just means the Study is mainly about supplying workers, not fixing everything wrong with the construction industry.

Key assumptions to be aware of

There are a few big assumptions in the background:

Latent capacity is usable
- The report notes there are many firms and workers who could move into housing.
- It assumes a meaningful share of them will, if the settings are right.
- In practice, that depends on pay, risk, geography, and whether housing looks attractive compared to mining, infrastructure or maintenance.
Policies get implemented and work as planned
- Scenarios for more apprentices, more women, smarter migration and better productivity all assume new policies are not only announced but actually delivered and taken up.
- Real life is often messier.
Developers and builders will respond
- The modelling works on the basis that if conditions improve, more projects will go ahead.
- It doesn’t dig deeply into what happens if developers stay cautious, banks stay tight, or builders simply don’t want to scale up after a bruising few years.
Workforce ≠ quality by default
- The Study talks about numbers of workers, not how well work is supervised or inspected.
- You can have more people on site and still end up with poor-quality, non-compliant builds if systems and culture are weak.

Where the Study is strong – and where it’s thin

Strong on:

Quantifying the scale of the workforce task.
Showing how housing sits within a bigger labour market, not a sealed box.
Laying out practical levers: apprenticeships, women, migration, productivity, training.

Thinner on:

How workforce pressure interacts with defects, supervision and NCC/AS compliance.
What labour shortages mean for contract disputes, variations and builder collapses.
How consumers are protected (or not) in a system that’s being pushed to deliver more, faster.

That’s not a criticism; it’s just the limit of the brief. As a home owner, you need to read it as a piece of the puzzle, not the whole picture.

What this means for you

For you, the useful way to think about the Study is:

It’s a map of the workforce landscape, not a guarantee your project will be fine.

It tells you:

Pressure on trades and supervisors is real.
Governments are trying to ramp up supply using multiple levers.
There are risks if the system is pushed hard without enough capacity.

It does not tell you:

That your builder is well-managed.
That your contract is fair.
That your home will automatically be built to NCC and Australian Standards without you needing to pay attention.

You still need to do your homework.

Conclusion – Planning a New Home in a Tight Labour Market

If you strip away all the charts and modelling, and wordy mcwordsmith from the Housing Workforce Capacity Study, things are pretty simple:

Australia wants to build 1.2 million homes in five years.
To do that, we need about a quarter more people working in residential construction than we’re currently on track to have.
Government and industry are trying to close that gap through apprenticeships, women in construction, migration, productivity and training.
None of that happens overnight.

In the meantime, you’re trying to plan one project – your home.

What the Study really tells you, as a home owner, is this:

Trades and supervisors are under pressure.
Time frames are optimistic by default.
Costs are sensitive to labour and productivity.
Quality and compliance depend heavily on supervision, systems and culture – not just headcount.

You can’t fix the national workforce issue, but you’re not powerless either.

You can:

Choose a builder who is honest about their capacity, not just keen for your signature.
Make design choices that are realistic to build with the skills and trades available locally.
Take your contract seriously – especially clauses around time, cost and variations.
Put your own safeguards in place through questions, documentation and independent inspections.

That’s how you protect your time, money and sanity in a market that’s being asked to do more with a limited pool of people.

FAQs

1. Will the trades shortage automatically make my build more expensive?
It pushes in that direction. Labour is a big chunk of construction cost, so when trades are busy and can choose their jobs, rates tend to rise. Whether your price goes up depends on when you sign, how your contract handles cost changes, and how much risk your builder has built into their quote.

2. Should I wait a few years until the workforce shortage is “fixed”?
Unlikely to be a quick fix. The Study talks about workforce changes that play out over several years – training, migration, participation. Waiting for everything to calm down could mean waiting a long time. It’s usually better to plan carefully now, choose your builder wisely and protect yourself through contract and process, rather than hoping the market will magically improve.

3. Are lots of apprentices on site a bad sign?
Not necessarily. Apprentices are how the industry renews itself. The real question is supervision. Apprentices working under experienced trades and a present supervisor is fine. Apprentices left to figure things out with minimal oversight is not. Ask who supervises them and how often that person is on site.

4. Will more overseas workers mean lower quality on my home?
Quality isn’t about nationality; it’s about licensing, supervision and standards. Anyone doing regulated work (plumbing, electrical, etc.) must still meet Australian licensing and NCC/AS requirements. Your job is to ask your builder how they verify licences, what supervision is in place and how they check work – regardless of where the worker was born.

5. What’s the biggest risk from the workforce squeeze – time, cost or quality?
All three are affected, but time and quality tend to hurt the most. Time because delays stack up quietly; quality because stretched supervision and inexperience can lead to defects that are hard and expensive to fix later. Cost is also affected, but you at least see the numbers. Poor quality often hides until after handover.

6. How can I tell if a builder is overstretched?
Watch for:

Vague answers about how many jobs and supervisors they have.
Long gaps in communication or slow responses before you’ve even signed.
Reluctance to give you a program or to explain how they manage delays.
Constant talk about how “everyone is flat out” without a clear plan.

If they sound like they’re constantly fire fighting, assume your job will be part of that fire.

7. Do independent inspections offend “good” builders?
Professional builders might not love extra scrutiny, but most will accept it if it’s reasonable and coordinated. A builder who reacts badly to the idea of independent inspections may be signalling more about their systems and culture than they realise. You’re entitled to your own checks, as long as you follow the contract and safety rules.

8. How do I balance being a reasonable client with holding the line on standards?
A fair approach is:

Be flexible about genuine, explained delays caused by things outside the builder’s control.
Be firm about NCC and Australian Standard compliance, workmanship and what’s actually in your contract.
Document everything important in writing.
Escalate politely but clearly when repeated promises aren’t met.

You don’t have to accept poor quality or contract breaches just because the market is tight.

9. Can government workforce policies guarantee my build runs smoothly?
No. Government can influence the overall supply of workers and training, but it can’t control how individual builders manage jobs, honour contracts or supervise staff. Policy is the backdrop. Your builder choice, your contract, and your own oversight still matter a lot.

10. I’m already under contract – is it too late to protect myself?
You can’t rewrite the whole deal, but you can still:

Understand your contract rights around time, variations and defects.
Ask for clearer communication and more structured updates.
Bring in independent inspections at key stages (if your contract allows – many do).
Document issues early and in writing.

It’s not as good as planning from day one, but it’s better than doing nothing.