Nearly half of Australia’s property industry stakeholders have expressed concern as the upcoming H2 2025 land release has been officially scaled back to 4,725 homes, representing a notable 6% reduction from H1 2025 supply levels, despite ongoing housing shortages across major metropolitan markets. This continuing trend of supply contraction follows a challenging period for the residential construction sector, with annual lot releases in 2024 totaling 42,700 nationally—a figure still 20% below long-run averages, indicating persistent structural issues within the housing supply chain.
Australia’s housing crisis deepens as 2025 land releases fall 6%, revealing fundamental supply chain failures despite critical market shortages.
The cumulative impact of restricted land releases is becoming increasingly evident, with releases since 2021 down 46% against projected “business as usual” scenarios, creating a substantial deficit in housing stock despite recent policy reforms designed to accelerate housing delivery. This deficit comes as the combined value of Australian residential real estate stands at $11.4 trillion. Singapore’s property market shows similar resilience with OCR price increases of 11.83% in Q1 2024, despite various cooling measures being implemented. April 2025 data further underscores these challenges, revealing a 5.7% decrease in total dwelling approvals to 14,633 units, alongside a significant 19.0% drop in private sector multi-dwelling approvals, falling to just 4,999 units.
Market responses to these supply constraints have been predictable, with median land prices surging 8% nationally in 2024 to reach $1,116 per square meter. Regional variations remain pronounced, with Perth experiencing a dramatic 34% increase to $329,000 per lot, while Sydney maintains the highest prices nationally at $666,670 per lot or $1,617 per square meter.
The landscape of supply constraints varies substantially across regions, with Victoria particularly affected at 45% below decade averages for new releases, while Queensland, South Australia, and Western Australia demonstrate more robust approval rates and release volumes. These regional disparities occur against a backdrop of continued strong population growth and low unemployment, sustaining underlying demand pressure. The recent data shows detached approvals up by 6.1% compared to the previous period, offering a glimmer of hope amid otherwise challenging supply conditions.
Industry analysts note that while recent state and federal reforms aim to accelerate housing supply, implementation lags and persistent barriers—including construction delays, high material costs, and infrastructure coordination challenges—continue to impede meaningful progress toward addressing Australia’s widening housing deficit.
