Australia’s housing reset: stop juicing demand, start building homes

Australia keeps treating housing unaffordability like it’s a problem of access—then reaching for policies that make it easier to buy (or bid) without fixing the hard part: not enough homes being delivered, fast enough, in the right places.

The result is predictable: when supply can’t respond, extra purchasing power tends to get absorbed into higher prices, not more roofs.

From 1 October 2025, the federal 5% Deposit Scheme was expanded so places are uncapped, income caps removed, and property price caps increased. Treasury Today, 5 December 2025, the federal Help to Buy shared-equity scheme opens for applications, with the Commonwealth contributing up to 40% (new) or 30% (existing), capped at 10,000 places per year. theguardian.com

Meanwhile, the best “big picture” warning light is flashing red: the National Housing Supply and Affordability Council (NHSAC) says 177,000 new dwellings were completed in 2024, versus underlying demand estimated at 223,000. NHSAC

The uncomfortable truth: demand help often becomes price help

This isn’t a moral argument against helping first home buyers. It’s a mechanical one.

When supply is tight, policies that expand buying power don’t reliably expand housing output. They expand competition. That’s exactly why demand surges linked to the expanded 5% deposit settings are already being reported alongside warnings about limited stock and renewed price pressure. Daily Telegraph

Even when governments argue demand measures are “targeted” or “modest”, the core problem remains: subsidising buyers doesn’t create more homes if approvals, trades, land servicing and builder capacity remain constrained.

The reset Australia actually needs: scrap demand stimulants, build supply

A true reset would keep support where it belongs: hardship safety nets and social/affordable housing for people who genuinely need it, now. The AIHW estimates 1.26 million low-income households were in housing stress in 2024–25. AIHW

But here’s the blunt policy truth: if Australia genuinely fixes supply, the ongoing “need” for broad buyer-boosting schemes should shrink, not grow. As affordability improves, fewer households get forced into desperate bidding just to secure shelter—meaning fewer people require perpetual purchase-assistance programs to “keep up” in a market engineered to stay scarce.

That’s why broad policies whose main effect is helping households bid more should not be “paused” or “redesigned”. They should be wound back and removed. Critics will call them vote-winners; supporters will call them fairness. Either way, they’re a distraction from the only lever that sustainably improves affordability across the whole economy: build enough homes that scarcity stops doing the pricing.

What a supply-first housing plan looks like

1) Planning rules that allow more homes where jobs and transport already are
Not endless announcements—actual “as-of-right” pathways that make medium-density infill legal, predictable and financeable.

2) Faster approvals and fewer duplications
Stop treating time as free. Delays are a hidden tax that inflates project risk and cost.

3) Infrastructure that unlocks land, not press releases that unlock borrowing
If water, sewer, roads and power aren’t sequenced, “more supply” stays a slogan.

4) Build capacity: labour, productivity, and delivery certainty
You can’t conjure record completions out of thin air—construction capacity has to be grown and stabilised.

5) Social and affordable housing scaled like critical infrastructure
Build it like you mean it: consistent pipelines, not stop-start grants that whipsaw delivery and costs.

A simple rule for Canberra (and every state)

If a policy increases purchasing power, it should face this test:

Show where the extra dwellings come from, and how fast — or don’t do it.

Because if we keep “helping buyers” without massively lifting supply, we’re not fixing affordability—we’re just rearranging who misses out, and how fast prices climb.