ACT housing supply shortfall deepens as approvals lag population growth

The ACT government has acknowledged that housing supply in Canberra is failing to keep pace with population growth, with the latest construction approval data showing dwelling completions running approximately 1,200 units per year below the estimated 4,800 dwellings per year required to stabilise the housing market and begin unwinding the accumulated shortage that has driven rental vacancy rates to historic lows and pushed median rents above $700 per week for three-bedroom houses.

Housing Minister Rebecca Vassarotti has committed to a review of the planning framework governing medium-density residential development, with a focus on reducing the approval timelines and development contribution requirements that industry groups have identified as the primary constraints on accelerating the supply response to the shortage.

The Property Council of Australia's ACT division released data showing that planning application processing times for medium-density residential developments in Canberra have averaged 14 months over the past two years — more than double the pre-2020 benchmark — as the planning authority has struggled with the volume of applications generated by the development activity that the shortage and rising land values have stimulated.

Rental affordability advocates have called for urgent intervention to support low-income renters who are bearing the most acute impact of the supply shortfall, with data from the ACT Shelter showing that households in the bottom two income quintiles are spending more than 40 per cent of their income on rent in the current market — a proportion that the housing affordability literature identifies as severe housing stress.

The government has committed to releasing additional lease sites in the Molonglo Valley and Gungahlin corridors and to expediting the approval of the affordable housing developments that the Land Development Agency is progressing. The timeline for meaningful supply response is estimated at three to four years under the optimistic scenario.

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