The ACT is falling behind its housing targets two years into the National Housing Accord, Master Builders ACT has warned.

The National Housing Accord aims to deliver 1.2 million new homes across Australia over five years from July 2024. The ACT’s share of the target is 21,000 new homes by 2028–29.

But Master Builders said new data showed the ACT had approved 6,960 homes since July 2024, well below the 8,410 required under the Accord, leaving a shortfall of 1,450 homes, or 17.2 per cent.

Approvals had slowed to 290 homes per month, down from 350 before the Accord and below the long-term average of 424, Master Builders ACT chief executive Anna Neelgama said.

“Two years in, this should be a progress check but instead it shows the ACT is not on track,” Ms Neelagama said.

She argued that poor planning performance, weak productivity, regulatory burden, and workforce constraints were holding back the delivery of new homes.

“The system is becoming less productive over time,” Ms Neelagama said. “The ACT now has the worst multifactor productivity in the country, and building and construction businesses are being asked to do more with less.

“At the same time, these businesses are operating in the highest property tax environment in the country by a country mile, yet the system is delivering fewer homes.”

Master Builders ACT called on governments to use the second anniversary of the Accord as a turning point to speed up approvals, cut red tape, and strengthen the construction workforce.

“Without reform, the ACT will continue to fall behind on its housing commitments, and supply, stability and affordability pressures will only get worse,” Ms Neelagama said.

But ACT Shelter said housing affordability could not be reduced to approval numbers alone. CEO Corinne Dobson said increasing supply mattered, but affordability depended on building the right mix of homes.

“Any sustained slowdown in approvals deserves attention, but we shouldn’t reduce a complex housing challenge to a single cause,” Ms Dobson said.

“There are well-recognised structural barriers to increasing supply, including planning and approval timeframes, workforce shortages and rising construction costs, and ACT Shelter does not accept that property taxes are the primary obstacle.”

Ms Dobson said approvals were an important indicator, but other independent assessments suggested the ACT remained on track to meet its National Housing Accord target.

She said the greater issue was the gap between homes approved and homes completed.

“Even if the Accord targets are met in the ACT, we will still fall well short of delivering the social and affordable housing needed to meet community need,” Ms Dobson said.

“Ultimately, success should not be measured simply by how many homes are approved, but by whether enough homes are built, and whether the people who need them most can afford to live in them.”

Master Builders said builders were ready to deliver more housing, and remained committed to working with the ACT Government to ensure planning settings supported the delivery of much-needed housing.