The National Housing Accord explained: the 1.2 million homes target and what it means for builders

The National Housing Accord is the policy framework behind most of the housing announcements builders have heard over the past two years: planning reforms, fast-track approval pathways, incentive payments to states, and a steady stream of reports on whether Australia is building enough homes. For residential builders, it matters because it shapes where governments are pushing supply, how approvals are changing, and how much political attention the industry’s costs and workforce receive.

This guide explains what the Accord is, how the target works, where it stands two years in, and what it means for builders, particularly in NSW.

What the Accord is

The Accord is an agreement between the Commonwealth, the states and territories, local government, institutional investors including major superannuation funds, and industry bodies including Master Builders Australia and the Housing Industry Association. Its original aspirational target was one million new well-located homes over five years from mid-2024. On 16 August 2023, National Cabinet lifted that to 1.2 million new well-located homes over five years from 1 July 2024, an extra 200,000 homes.

The Accord is not a construction program. Governments do not build most of the homes. It is a commitment to create the conditions for the private sector, community housing providers and governments together to build more: planning and zoning reform, land release, infrastructure, and funding for social and affordable housing.

How the target is shared

Each state and territory has a share of the target. NSW’s is the largest: 377,000 new homes over the five years to July 2029. Each jurisdiction has also agreed an implementation schedule setting out the reforms it will pursue, which Treasury publishes and which are reviewed annually.

The target counts completions, not approvals or commencements. That distinction matters. A surge in approvals only helps if the homes are built, and every home counted is a home a builder has finished.

The money behind it

The Commonwealth has attached funding to the target. National Cabinet endorsed $3.5 billion in payments to state, territory and local governments to support new homes. Within that, the $3 billion New Home Bonus provides performance-based funding to states and territories that build more than their share of the original one million homes target, at $15,000 for each additional home. A $500 million Housing Support Program funds enabling infrastructure and planning capability in well-located areas.

Alongside the market target, the Commonwealth committed $350 million over five years to support 10,000 affordable homes, with the states agreeing to support up to another 10,000. NSW’s allocation of those state-supported affordable homes is 3,100. Treasury notes the Commonwealth-supported affordable homes are to be delivered at an energy efficiency rating of 7 stars or greater.

Where it stands

The National Housing Supply and Affordability Council reports on progress. Its August 2026 Quarterly Report, released on 21 August, found about 308,000 new homes completed since the Accord began, roughly a quarter of the target, with completions data covering 7 of the 20 quarters in the Accord period. Approvals and commencements were up on the quarter before the Accord began, and a record 244,000 dwellings were under construction in the March quarter 2026.

But the pace of completions is well short of what the target needs. Building 1.2 million homes in 20 quarters means about 60,000 a quarter. On the Council’s figures, the first seven quarters averaged about 44,000.

The Council now expects the target to be reached in the December quarter of 2030, a year and a half after the Accord period ends. It expects NSW to reach its share in the March quarter of 2032, later than every other mainland state; only Tasmania and the Northern Territory are further behind. It pointed to rising construction costs, pushed up recently by higher fuel and petrochemical prices, as a risk to the feasibility of some projects. House construction costs were 51% higher in the June quarter 2026 than before the pandemic.

Reading the progress reports

Because the Accord counts completions, and completions data arrives with a lag, the progress reports always look backwards. The August 2026 report used completions data to the March quarter 2026, while approvals data ran to June. For builders, that means the reports are best read as a picture of the pipeline rather than a scorecard. Approvals today become commencements in a few months and completions a year or more later, depending on the type of dwelling.

Three numbers are worth watching in each report: approvals, which show where demand and planning are heading; dwellings under construction, which show how much work is on the ground and how stretched trades are likely to be; and construction costs, which show whether projects remain feasible. A rising number under construction alongside flat completions usually means projects are taking longer to finish, which is a signal of trade and material pressure.

A worked example: the town-centre builder

A small builder in a Sydney suburb has built knockdown-rebuild homes for a decade. The state’s planning changes around the local town centre now allow terraces, dual occupancies and small apartment buildings on lots that previously allowed only houses. Developers and landowners start asking about two- and three-dwelling projects.

The builder weighs the opportunity. Dual occupancies and terraces are within their licence and experience; small apartment buildings of more than three storeys would bring in the Design and Building Practitioners Act, a different insurance position and a bigger balance sheet. They decide to take on dual occupancies and terraces, invest in better scheduling and documentation to manage two dwellings at once, and build a relationship with a local certifier familiar with the new controls. The Accord never names their business, but it is the reason their pipeline changes shape.

Why the target is hard

The obstacles are the ones builders deal with every day. Construction costs rose sharply after the pandemic and have stayed high. Interest rates affect both buyer demand and developer finance. Skilled trades are in short supply, and apprenticeship completion rates are low. Planning and approval times vary widely between councils. And the target measures homes finished, so every delay between approval and completion pushes progress back.

Industry groups have argued that regulation, taxes and charges add substantially to the cost of new homes and that policy changes, such as restrictions on investor lending or borrowing, can reduce supply. Governments have responded with planning reforms, fast-track pathways and workforce measures. Whatever view one takes of the arguments, the gap between the target and actual completions is not in dispute.

What it means for NSW builders

In NSW, the Accord has driven a series of planning changes aimed at increasing supply, including the Housing Delivery Authority for large projects, low and mid-rise housing reforms around town centres and transport, and changes to complying development and approval timeframes. Social and affordable housing programs, such as the Housing Australia Future Fund round covered in our news section, add public and community housing work to the pipeline.

For builders, several practical consequences follow:

• A policy tailwind. Governments want more homes built and are removing some planning barriers. Medium-density infill, dual occupancies, terraces and townhouses are being encouraged in well-located areas.
• Standards are not relaxing. The drive for supply sits alongside the NSW building reforms on quality: licensing, inspections, the Design and Building Practitioners Act and decennial liability insurance. More homes does not mean lower standards.
• Costs and trades remain tight. Demand for trades from the push for supply keeps pressure on labour costs and availability.
• Affordable and social housing work. Programs tied to the Accord create opportunities for builders who can meet the documentation and energy performance requirements of government and community housing clients.
• Prefabrication and modern methods. Governments see modular and prefabricated construction as one way to lift output, and NSW has begun recognising it in legislation.

How to use the Accord in your business

The Accord is not something a small builder signs up to, but it is a useful signal. Watch where your local council and the state are rezoning and fast-tracking, because that is where the next few years of work will come from. Consider whether your business can deliver the housing types being encouraged, such as dual occupancies and small multi-unit developments. Build relationships with community housing providers if you want affordable housing work. And keep track of the quarterly reports: they are the clearest public indicator of where the housing market is heading.

Be realistic about the risks, too. A strong pipeline of approvals does not guarantee profitable work. Fixed-price contracts signed in a period of rising costs can turn a busy year into a loss, and a developer client on a thin margin can become a payment risk if sales slow or finance tightens. The same discipline that protects a builder in a quiet market, careful pricing, rise-and-fall or provisional sums where appropriate, progress payments that match the work, and checking a client’s capacity to pay, matters even more when governments are pushing hard for volume.

The bottom line

The National Housing Accord commits governments to 1.2 million new homes in the five years from mid-2024, with NSW responsible for 377,000. Two years in, about a quarter have been built, and the target is now expected to be reached about eighteen months late. For builders, the Accord means continued policy support for supply, new planning pathways, and ongoing pressure on costs and trades, alongside quality reforms that are not going away.

Questions builders ask

• Construction costs
• Housing Accord
• Housing supply
• NSW

Published 7 September 2026. General information for builders, not legal, financial or engineering advice for a specific job. Check current requirements with the relevant regulator or standard before relying on them.