The combined cost of land and construction has climbed to a point where building a new home is no longer competitive with buying an established one. Residential lots are expensive, and the cost of materials and labour remains elevated. 

This price imbalance is changing buyer behaviour. More households are opting to purchase existing homes, while those who want to build are increasingly looking beyond the ACT’s borders to nearby regional towns.

The impact is clear in the numbers. The rate of new home building in the ACT has slowed significantly compared with the pre-pandemic years. If we are to meet the Territory Government’s ambitious goal of 30,000 new homes by 2030, we need a marked turnaround in housing activity - and fast.

There have been significant changes recently within the ACT’s ‘Machinery of Government,’ notably the creation of the City and Environment Directorate, which brings most planning functions under a single governance structure. 

This new arrangement appears to reflect as an aspiration to better coordinate and facilitate housing supply. However, good intentions must translate into outcomes. Residential building activity will serve as an objective barometer of how successful these changes are in practice.

Meeting the 30,000 homes by 2030 target will also require major growth in infill housing, with the government’s 70/30 split between infill and greenfield developments putting enormous pressure on the existing urban footprint. 

While the need for diverse housing options is clear, infill to date has been dominated by large apartment projects. The ‘missing middle’ - townhouses, duplexes, and other low to medium density options - remains largely untapped. 

The Government’s work on the Missing Middle Housing Reform agenda is a positive step. Unfortunately, three major challenges stand in the way of the Missing Middle’s success:

1. Lease variation charges (LVCs) are so high they render small-scale projects financially unviable.
2. The Urban Forest Strategy, while important, directly conflicts with redevelopment. We need better mechanisms to manage the removal and replanting of trees to balance the urban tree canopy with housing needs.
3. The incoming Developer Licensing Scheme risks adding unnecessary administrative costs, particularly for small-scale infill projects. Someone who knocks down an old house on an RZ1 block and builds three townhouses is not a “property developer” in the traditional sense and shouldn’t be treated like one.

If we want the Missing Middle to play a meaningful role in Canberra’s housing future, we must lower barriers and make it easier for these projects to proceed. Without urgent reforms, more Canberrans will be forced to look outside the ACT for their new home - and our 30,000 homes target will slip further out of reach.

The first fortnight has shown me just how passionate the Canberra community is about housing, but also how challenging the road ahead will be. It’s time to rethink our approach and make building new homes in the ACT a realistic option once again.

For more information please contact: