What the new population figures tell us about Australia's housing needs

Australia’s latest population projections show ongoing growth will continue to test the nation’s ability to deliver enough new homes, even as the pace of population increase begins to slow.

Australia’s population is projected to reach 31.5 million by 2035–36, according to the 2025 Population Statement released by the federal government. Published annually since 2020 by the Centre for Population, the statement provides insights into demographic trends to help governments plan for future housing, infrastructure and service needs as Australia’s population changes Population growth is forecast to slow, easing to 1.3% in 2025–26 and 1.2% from 2026–27 onwards, below the 1.4% average recorded during the 2010s.

Even so, Australia is still projected to add more than 300,000 people a year through the latter part of the decade. Net overseas migration — the main driver of population growth — fell to 306,000 in 2024–25, lower than previously forecast and close to half the post‑COVID peak. It is expected to moderate further to 260,000 in 2025–26 and decline again over the forecast period. Population growth is expected to remain uneven across the states and territories.

Western Australia is forecast to record the fastest growth in the near term, with its population rising 1.8% in 2025–26. Victoria, Queensland and Western Australia are projected to be the fastest‑growing states over the next decade, while New South Wales is expected to remain the nation’s most populous state, reaching 9.6 million people by 2035–36, or 30.6% of the national population. The projections come as Australia works to meet its home building ambitions under the National Housing Accord, which targets adding 1.2 million new homes between July 2024 and mid‑2029.

Meeting that goal would require construction of around 240,000 new homes each year. However, 168,050 dwellings commenced construction nationally in the 2024 calendar year, according to Australian Bureau of Statistics (ABS) data.

Treasurer Jim Chalmers said progress had been made across the economy but acknowledged the scale of the task ahead.

“We’ve made a lot of progress in our economy in the past few years, including when it comes to building more homes, strengthening our migration settings, investing in skills and helping to ease the cost of living for Australians, but we recognise the job is far from over,” he said.

Recent Housing Industry Association (HIA) analysis found Australia remained well short of its housing supply needs as income and population numbers continue to grow.

HIA senior economist Tom Devitt said population growth continued to outpace housing delivery. “This is the central challenge facing the housing market in 2026,” he said. “A constrained supply of new homes is adding to upward pressure on rents, prices and inflation itself, which in turn feeds back into higher interest rates. “It is particularly counterproductive that the shortage of housing supply is putting pressure on inflation and interest rates, further impeding new home building.” Despite the ongoing supply gap, the latest ABS building approval figures show momentum is beginning to lift. In November 2025, total dwelling approvals rose 15.2% to 18,406, the highest level since February 2022, driven largely by approvals for higher‑density housing such as apartments and townhouses.