“The national project to make housing more affordable is focused entirely on increasing supply [and] … The plan for meeting the supply target is to change planning laws and allow more density in middle suburbs…” So wrote revered Australian economic analyst, Alan Kohler, in 2025.
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Especially when it comes to the official narratives that accompany national housing policy in the 2020s, very similar comments could be for other countries, including Canada and the UK, to name but two.
Even so, Kohler’s pithy summary underplays the diverse range of approaches that governments are, in fact, nowadays deploying in their housing supply-focused efforts.
Moreover, while largely centred on planning reform and other “market enabling” measures, this body of initiatives in Canada and Australia includes the direct commissioning/funding of housing construction on a scale without recent precedent.
Mainly to explore possible scope for internationally adaptable approaches to boosting housing supply, our new study compared the post-pandemic housing market challenges and policy approaches of Canada and Australia, two of the world’s most comparable nations.
Structural factors
In both countries, housing affordability challenges have come to the fore in policy and political debate since the 2010s, with rising house prices and rents generally outpacing incomes. Thus, Canada’s national house price-to-income ratio rose from under 4.0 in 2003 to 7.7 by 2022, with a similar increase observed in Australia.
At the same time, the nature of the housing supply challenge in the early 2020s contrasts significantly across the two countries. Most notably, trends in apartment construction have markedly diverged. By 2024, such building starts had fallen by 48 per cent from their 2016 peak in Australia, whereas Canadian unit commencements had surged by 71 per cent over this period.
The main explanation for this contrast appears to be the revived vitality of Canada’s purpose-built rental (PBR) apartment industry in the post-GFC era. This is a sector far more strongly represented here than in Australia. Canada’s PBR construction surged more than threefold in the decade to 2024, to represent a remarkable 42 per cent of all housebuilding by that latter date.
At least as demonstrated by the Canadian PBR industry’s relatively stable output in the immediate post-pandemic era, this speaks to the product’s resilience in the face of challenging market conditions.
While abetted by favourable lending and mortgage insurance policies, the main explanation is probably the overriding priority PBR investors place on long-term rental returns. This leaves them relatively sanguine about short-term market conditions and prospects.
Encouraging planning liberalisation
Efforts to both liberalise land-use zoning restrictions and streamline development approval processes are indeed central to contemporary pro-housing supply efforts in the two countries. However, federal administrations are constitutionally constrained here. Lacking powers to mandate planning policy (controlled by state or territory or local governments), federal influence must be transmitted indirectly.
In Australia, this has recently progressed via the 2022 National Housing Accord. Central to this inter-governmental agreement was the commitment by signatory federal, state or territory and local authorities to “improving zoning, planning and land release”.
Accord participants also endorsed a national housebuilding goal to construct 1 million new dwellings 2024-29, later upped to 1.2 million homes within that timeframe. The federal government pledged a $3 billion “new home bonus” payable to state or territory governments, conditional on achievement of jurisdiction specific building targets.
Parallel Canadian efforts have centred on the federal Housing Accelerator Fund (HAF), a $CAN 4 billion program to incentivise planning and other relevant reform by local governments. More subtly, HAF payments are intended to support municipalities growing housing supply “faster than [the local] historical average”.
As operationalised since 2023, Canada’s HAF program has involved federal-municipal agreements where, in exchange for pledged federal payments, lower tier governments have committed to specific planning reforms and other undertakings to expand housebuilding.
Beyond their status as “reward payments” for relaxing or simplifying land use planning, Canadian HAF subsidies fund other municipal actions on housing supply. To the fore here are local commitments to channel such funds into affordable housing construction.
Other pro-supply measures
As unpacked in our research, though, pro-housing supply measures now rolling out in the two countries extend well beyond planning liberalisation. As represented to some degree in both Canada and Australia, these include:
- infrastructure funding support
- low-cost debt facilities and development de-risking
- federal property tax reform
- workforce capacity building
- technological development
- government-funded housing production
- identifying and allocating public land for affordable non-market development.
Generally speaking, these interventions have been disproportionately larger and more ambitious in the Canadian case – especially when it comes to de-risking private housing development, and in the financial support pledged for pre-fabricated (or ‘modular’) housing construction.
But, while “market enabling” measures remain dominant, recent initiatives have seen both countries also pledging muscular interventions in the commissioning and funding of housing for both sub-market rent and sale. The new Build Canada Homes agency is tasked with “[constructing] affordable housing at scale” – including $CAN 4 billion loans and $CAN 6 billion contributions to [non-market] “deeply affordable housing, supportive housing, Indigenous housing, and shelters’’.
Meanwhile, the Australian Government pledged in 2025 to commission 100,000 homes for (ring-fenced) sale to first home buyers over eight years. This revives a practice which contributed significantly to expanding Australian home ownership under the Keynesian consensus of the early post-war period, although subsequently absent for half a century until now.
The modern pre-occupation with expanding housing production while doing little to dampen housing demand remains highly questionable. But the range of pro-supply initiatives in fact proceeding in countries such as Canada and Australia is far broader than the dominant “planning deregulation” narrative implies. These extend to measures that, in their interventionist nature, arguably challenge decades of neo-liberal orthodoxy.
One of the factors we’re finding with construction is, basically, a lack of skilled labour. Some countries are bringing skilled labour in for a few years at a time on the basis that they receive the same rates of pays as the rest of the workforce. For a tradie from a third world country, this means that five years spent overseas working is enough to, literally, set them up for life. It would work well here. The overseas trades that do get to work here are willing, enthusiastic, and at least as skilled as our home-grown variety.