Simply building more houses will not solve the housing crisis—at least not if the broader structural issues (like land costs, planning delays, taxes, and investor-driven demand) remain unchanged. Supply is critical, but it’s just one part of a deeply interconnected problem.
1. Cost of Land & Infrastructure
- In many urban areas (e.g. Brisbane, Gold Coast, Sunshine Coast), the land component of housing is now more expensive than the house itself.
- New developments often require substantial investment in roads, water, and services—costs that are passed on to buyers.
- Local councils and developers clash over who pays for infrastructure upgrades, leading to delays and increased charges.
2. Planning & Regulatory Bottlenecks
- Lengthy approval processes for rezoning, subdivision, or building can delay projects by years.
- Zoning restrictions (like limits on medium-density housing in inner suburbs) artificially constrain supply.
- Council and state government charges (infrastructure levies, fees, etc.) can add $100,000+ per dwelling in some areas.
3. Cost of Construction
- Labour shortages, rising material costs (e.g. timber, concrete), and builder insolvencies have dramatically pushed up prices.
- Post-COVID supply chain issues haven’t fully resolved, and insurance costs for builders are higher too.
4. Demand Side Pressures
- Population growth, migration, and household expenditure has increased whilst wages growth remains stagnant.
- Tax settings such as Land Tax, CGT and Local Rates do not support increased ownership and create excessive cost burdens on investors who provide essential rental property to tenants who chose to rent or are limited to renting over ownership.
- Easy credit policies for years (low interest rates and high borrowing power) fueled price escalation causing rents to increase along with property prices.
5. Lack of Coordination Between Government Layers
- Federal immigration policy brings in people but doesn’t coordinate with state and local housing strategies.
- States run housing programs but rely on local councils to approve dwellings—and councils often face local pushback (NIMBYism).
- Infrastructure funding is often delayed or conditional.
So, Will Building More Homes Fix It❓
Building more homes is necessary, but not sufficient. Without reform to:
- Land release processes,
- Planning systems,
- Development charges,
- Tax policy at state and local levels,
- Construction costs and material costs,
housing supply will always lag demand and come at unaffordable prices, but moreover, increased material costs since the scamdemic, have forced builders to the wall in particular in Victoria where the communist style Government imposed illegal, punitive and restrictive population controls that shut down business entirely for a protracted period. The effect on the building industry was seen with fixed price building contracts that could no longer be honoured once trade resumed because costs had surpassed the price fixed to build the houses. More than 700 building companies collapsed between 2023 and 2025.
Also, much of the new supply being built isn’t affordable housing—it’s high-end apartments or homes appealing to the white collar class, not what low- to moderate-income earners need or can afford. This is forcing interstate migration to locations where prices for land and housing is cheaper, such as regional areas of Qld and NSW.
💡 Evidence-Based Solutions
Australia’s housing crisis is a policy design failure across three levels of government:
- Supply constraints from planning and infrastructure mismanagement.
- Demand inflation driven by low interest rate environment and increased demand for higher investment returns.
- Poor coordination across departments and levels of government.
- Lack of political will to challenge the cost imposition upon construction and home ownership.
Without reforming these issues, simply building more homes won’t make them affordable. In fact, developers won’t build if the return isn’t there, regardless of need.
✅ What Could Actually Help?
- Fast-track approvals for affordable and medium-density housing.
- Revise developer and home builder charges to remove GST, Stamp Duties, application fees, and provide transparently.
- Incentivise build-to-rent models that offer long-term, stable rental supply, and apply the same incentives to existing rental properties for the benefit of landlords and tenants.
- Adjust tax incentives to reduce the cost burden upon building houses and subdividing land in needed areas.
- Reduce migration targets to allow housing to catch up, and provide more TAFE and further education pathways for trade related services such as building, electrical, plumbing, bricklaying and skilled labour.
- Boost public and community housing—particularly for vulnerable people and allocated unused Government land for this purpose urgently.
- Ensure banks are facilitating incentives for construction related borrowings and supporting the flow of capital to essential or needed projects.
🏠 Cost Breakdown of a New Home in Queensland
A significant portion of the cost is attributed to taxes and regulatory charges. For instance, in Brisbane, these costs can account for up to 41% of the total cost of a new house and land package. Property Council Australia+1Property Council Australia+1Property Council Australia+2couriermail+2Property Council Australia+2
To provide a clearer perspective, here’s a simplified breakdown of the costs involved in building a new home in Queensland:
| Component | Estimated Cost |
|---|---|
| Land | $357,717 |
| Construction | $289,200 |
| Taxes and Charges | Up to and in excess of 41% of total |
| Total Estimated Cost | ~$843,000 |
Note: The percentages for taxes and charges are based on specific reports and may vary, however this is considered the lower end of the market, middle income areas can be much higher.