The Albanese Government’s promise to build 1.2 million homes over five years is looking increasingly delusional.
The latest data on housing starts, loans for the construction or purchase of new dwellings, and new home sales all point to a sharp slowdown in new home construction in Australia over the next few years.
This slowdown in home building will occur at the same time that Australia’s population is growing at its fastest rate in history due to the Albanese Government’s unprecedented immigration program.
As a result, Australia’s housing shortage will continue to worsen as demand via immigration easily outruns new housing supply:

The first fatal flaw in the Albanese Government’s 1.2 million homes target is that the nation is suffering a critical shortage of builders.
This barrier was summed up by research from PRD pertaining to South East Queensland, but equally applicable to the nation as a whole.
“PRD reveals more than 40% of all 196 residential projects worth over $10 million due to start construction in South East Queensland between January 2022 and 2024 do not have an explicit builder or design builder assigned”, The Australian reported last week.
“If we can’t fully rely on projects that already have a builder going ahead, due to labour and material issues, higher construction costs, and delays in delivery timelines; how can we rely on our housing supply actually increasing?”, PRD chief economist Diaswati Mardiasmo said.
The second fatal flaw is that nearly one-third of home builders across the nation are losing money, according to the latest Financial Stability Review from the Reserve Bank of Australia.
“A sharp rise in construction input costs, compounded by costly delays arising from labour and materials shortages, as well as bad weather, has eroded profit margins on existing fixed-price contracts for many residential builders”, the RBA said.

In turn, insolvencies among the construction industry has spiked, as illustrated in the next chart from the RBA:

How will the Albanese Government meet its 1.2 million housing target when building firms are losing money and collapsing at an alarming pace, materials and financing costs are sky high, and there is a chronic shortage of actual construction workers?
The Albanese Government has set a five-year housing target of 240,000 new dwellings per year.
Only once in 2017 did Australia construct just over 220,000 dwellings in a single year. And this was accomplished at a time when the supply of workers was relatively plentiful and costs for both labour and materials were inexpensive:

Australia’s population was projected in the May federal budget to grow by 2.18 million over the five years to 2026-27. And the current run rate is above this level.
There is simply no reality where Australia builds enough homes to accommodate that growth.
The only realistic answer to Australia’s housing shortage, then, is to reduce net overseas migration to a level that is consistent with the capacity of the country to provide housing, infrastructure, and safeguard the natural environment.

Otherwise, Australia’s housing shortage will continue to worsen and living standards will collapse.