HIA recently released its Economic and Industry Outlook report. The report includes updated forecasts for new home building and renovations activity nationally and for each of the eight states and territories.

“Relatively affordable land and housing and rapid population growth – from both overseas and interstate – has catapulted Queensland out of the trough caused by higher interest rates,” added Mr Fry.

“North Queensland in particular has seen building approvals surge in the last year, including increases of 50.8 per cent in Mackay-Isaac-Whitsunday (+102.1 per cent in Mackay alone), +49.1 per cent in Central Queensland (+83.8 per cent in Gladstone, +35.3 per cent in Rockhampton) and +29.1 per cent in Townsville – North Queensland.

“Cairns – Far North is the main North Queensland region that is yet to see this kind of improvement, with building approvals up by just 0.7 per cent in the last year. Infrastructure bottlenecks are standing in the way of the next major wave of home building in Cairns.

“This will be a challenge as demand for housing is expected to strengthen further on the back of population growth, low unemployment and now falling interest rates.

“All regions face their own constraints and obstacles to building the housing needed to support their current and future population and to meet their shares of the Australian government’s target of 1.2 million new homes over five years.

“North Queensland is forecast to commence construction on around 19,000 new homes in the five years to June 2029, about 3,800 per year. North Queensland’s share of Australia’s population, however, would imply a required annual build rate of around 5,300 new homes. 

“Like much of the country, North Queensland suffers from acute shortages of housing. Rental vacancy rates are around, and sometimes below, 1 per cent, resulting in rental prices soaring over the last five years.

“Combined with overly conservative lending standards limiting access to finance, this is putting more strain on aspiring homeowners, especially first homebuyers.

“Significant building volumes are required. The challenge is for policymakers to address the constraints facing the industry.

“Skilled labour is one such constraint. Improving home building volumes, ongoing public infrastructure projects and renovations activity, and near-record low rates of unemployment across the economy, are keeping skilled trades scarce, especially in the regions.

“With the Brisbane Olympics coming up, ensuring an adequate construction workforce in Queensland becomes all the more important.

“The outlook for housing markets across the country, including the regions, will depend greatly on the ability of local, state and federal policymakers to bring affordable shovel-ready land to market and help reduce the costs and regulations on home buyers, investors and the industry,” concluded Mr Fry.

Forecasts

Detached houses: There were an estimated 3,050 detached houses commenced in North Queensland in 2024, 16.9 per cent up on the previous year. This is expected to be followed by further increases of 7.8 per cent in 2025, 6.3 per cent in 2026 and 0.6 per cent to a 2027 peak of 3,520, before moderating back to 2,740 by 2029.

Multi-unit dwellings: There were an estimated 410 multi-units commenced in North Queensland in 2024, 15.3 per cent up on the previous year. This is expected to be followed by a further increase of 8.2 per cent in 2025, continuing to 630 commencements in 2029.

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