Government officials warn housing commencements surge may not deliver more homes

Ken Foxe

Government officials raised concerns that a surge in housing commencements might not translate into completed houses or apartments.

Internal papers said builders had rushed to take advantage of development charge waivers by registering commencements ahead of deadlines, but that some projects were not progressing.

In many cases, officials believed that developers were either stretching out build times or that construction had not always started.

Observations from the Department of Housing said waivers on local authority charges and refunded water connection fees had encouraged builders to ‘commence’ schemes quickly.

However, this did not necessarily mean an increase in the number of houses and apartments actually coming on the market.

A Department of Finance paper said government measures had led to a record number of commencements in three successive months in 2024.

An internal paper said: “The record volume of notices during the year raises questions around whether the sector can translate those commencements to completed units as efficiently as they have historically.

“A change in average time to completion would mean short-term expectations for housing output would need to be recalibrated.”

The paper suspected that builders were either intentionally spreading resources across multiple projects or that some developments underway were not active.

It said there was some data available from inspections showing the rate of non-starts on sites was three times higher than in the past.

The research said forecasts for future housing output might need to be revised if projects were more slowly delivered and others might not proceed as expected.

It said while it was possible that developers were spreading resources across multiple projects, this could be very costly for them.

The paper explained: “This suggests that at least some of [the commencement notices] associated with [the] operation of the Levy Waiver Scheme have not materialised.”

In response, officials from the Department of Housing acknowledged the concerns and said it was becoming more difficult to forecast completions of new houses and apartments.

However, they said it was important that an impression was not created that housing delivery or output had slowed down.

A note said: “The uplifted delivery of the last three years is being maintained and as such we need to be careful with language such that we do not misrepresent this and conflate two different issues.”

Asked about the records, a spokesman for the Department of Housing said the six months to end February 2026 saw the highest monthly totals of commencements since the end of development levy waivers in December 2024.

He said: “An analysis of the notices lodged between April 2023 and December 2024 (for developments of five or more homes) indicates 90% of the associated sites had been activated.

“The analysis also indicates that 90% of ‘apartment only’ developments have been activated, suggesting the potential for a further increase in delivery this year.”

The spokesman said more than 36,000 new homes were completed in 2025 and that government policies and supports were on track to address future housing needs.

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