By Aaron Ng, Founder – The Good Builder
Summary:
Australia has built more new homes per capita than many of its global peers, yet housing has never felt less affordable. This opinion piece explores why the simple supply-and-demand narrative fails to explain the crisis we’re in, and what we need to do instead.
If I hear one more blanket statement about “we just need to build more houses,” I might genuinely lose it.
This idea has become the political shortcut of the decade, a catch-all excuse that sounds simple, sensible, and conveniently shifts the blame onto the construction sector. But here’s the thing: we are building. In fact, Australia added one new home for every 2.1 people between 2005 and 2022, this is more, per capita, than the US, UK or Canada during the same period.
So if we’re building faster than most of the developed world, why does it still feel like we’re falling behind?
The answer isn’t simple. But that’s the point. This isn’t a simple issue, and anyone pretending it is either doesn’t understand the system or is deliberately avoiding harder truths.
The Productivity Blame Game…A Closer Look
Let’s unpack this “we’re not building fast enough” narrative.
Housing economists often point to the gap between supply and demand, arguing that if we don’t build enough homes, prices rise. But here’s what the numbers actually show:
According to the State of the Housing System 2024 report, from 2006 to 2021, Australia’s housing stock grew by 22 per cent, while the population increased by 25 per cent. In other words, we’ve largely kept pace with population growth over the past 15 years.
That makes Australia one of the better-performing countries in terms of supply per capita. We’ve even outbuilt countries like the US, UK, and Canada over the same period:
Yet despite this, Australia experienced the steepest increase in housing prices among those nations, with house prices rising by over 120% in that time.
Clearly, this isn’t a productivity issue. We’re doing our part.
So why are prices still surging?
Homes Are Not Just Homes…They’re Assets
The truth is, housing in Australia functions less like shelter and more like a financial product.
Speculative demand, fuelled by tax incentives like negative gearing and capital gains discounts, has pushed prices up across both new and existing housing stock. Investors aren’t just buying to live, they’re buying to hold, flip, and capitalise.
And because developers build for profit not for need, and construction doesn’t automatically follow population growth. It follows returns.
That’s why you’ll see cranes all over inner-city precincts pumping out $900k apartments while regional towns struggle to get a basic duplex built. The market isn’t broken, it’s doing exactly what it’s been designed to do.
And don’t even get us started on Build-to-Rent.
The model is pitched as a solution to the rental crisis, but in reality it’s riddled with structural issues. It’s driven by institutional capital, legally obligated to serve shareholders over tenants. Despite all the talk about easing housing stress, most BTR offerings are targeted at affluent renters — completely out of reach for low or even middle-income households.
Worse, many of these developments rely heavily on taxpayer subsidies to stack up financially, and some operators are known to deliberately keep units empty to protect rent yields. It’s a private model built on public generosity — with very little to offer the people who actually need affordable housing.
What’s Really Holding Us Back?
Here are a few of the real levers at play and none of them have anything to do with lazy builders or unproductive tradies:
1. Investor-Driven Demand
Investors now make up more than a third of all housing finance commitments. That means home prices are being shaped by those looking for capital gains, not housing security.
2. Land Speculation
Landowners and developers often hold sites until the market peaks. “Just rezone and they will build” is a myth. Development timing is profit-driven, not population-driven.
3. Fragmented Planning Systems
Australia’s planning system is a patchwork. Every state has its own frameworks, local governments hold immense power, and delays are the norm, not the exception.
4. Materials & Labour Costs
Global supply chain issues and domestic skills shortages have driven up the cost of delivering homes. That’s not a builder problem, it’s an economic one.
5. Public Housing Neglect
We’ve offloaded housing delivery almost entirely to the private market. Australia now ranks among the lowest in the OECD for social housing as a share of total stock. That safety net is gone.
The Media Narrative Isn’t Helping
Every time a new housing target is missed, or a builder collapses, headlines point to industry failure. But rarely do they ask:
- What funding environment are builders operating in?
- What planning barriers delayed this project?
- What role did land speculation or investor activity play?
Instead, we get reductionist narratives: that tradies are too slow, that builders are unproductive, or that industry can’t keep up.
This misdiagnosis isn’t just frustrating and it’s dangerous. Because if we keep treating the problem as purely one of supply, we’ll keep applying the wrong solutions. And we’ll keep being surprised when they don’t work.
We’re Doing Our Part…But the System Isn’t Backing Us
At The Good Builder, we spend our days talking to builders, suppliers, trades, and developers on the ground. These are people who want to deliver good homes, who are improving their systems, upskilling teams, and adapting to tough market conditions.
But we’re operating in a system that’s tilted against long-term thinking.
Builders carry enormous financial risk. Margins are thin. Regulation is fragmented. And meanwhile, we keep handing the megaphone to think tanks and property columnists who’ve never set foot on a job site.
We need a national conversation that’s honest about what’s really driving our housing dysfunction. Because until we shift the narrative, from one of blame to one of systems changem we’ll stay stuck.
A Better Way Forward
So what does a smarter, more balanced approach look like?
- Reinvest in public and social housing to take pressure off the private market.
- Reform tax incentives that privilege speculation over home ownership.
- Streamline planning processes to support genuine, well-located development.
- Support builders through stable pipelines, fair contracts, and skilled labour programs.
- Regulate the rental market to ensure affordability and security for long-term tenants.
This isn’t about ideology. It’s about designing a system where housing serves people, not just portfolios.
Final Thought
We don’t need to build more, we need to build better. And we need to create a system that rewards those who do.
If you’re a builder, supplier, or industry leader who’s tired of the finger-pointing and ready to build a smarter future, you’re not alone.
Let’s talk. Let’s share ideas. Let’s shift the conversation.
Because the problem isn’t that we’re not building fast enough.
It’s that we’re building within a system that’s not fit for purpose.
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