by Sanjeev Sah | Jun 04, 2024 | Market Updates

The Housing Industry Association (HIA) has said that the construction of apartment units must double to meet the federal government’s target of facilitating the building of 1.2 million new homes by 2029.  

HIA’s Economic and Industry Outlook report predicts 64,350 multi-unit commencements for the 2023/24 financial year. While this is up 2.0% from the previous financial year, it’s almost half the amount begun in 2016. 

HIA chief economist Tim Reardon said that apartment construction has been held back by shortages of labour and materials, as well as high costs, which are all expected to persist for at least another year.  

“Competition for inputs remains intense against other sectors including non-residential construction and mining. This is occurring amid continued spending on public infrastructure projects, which is crowding out the home building, especially the high-rise apartment sector,” he said. 

“The subsequent shortfall in supply over the next few years will be observed in extremely low rental vacancy rates and extraordinary growth in rental prices.”  

National rents rose 8.5% over the year to April, according to CoreLogic data (see image).