Builders warn state is failing to nail housing targets

Previous modelling found a 28,950-house shortfall, but this has more than doubled to 73,700, the body's latest data shows.

High inflation and interest rates, combined with supply constraints including planning barriers were blamed for the shortfall in the the state's contribution towards 1.2 million new homes nationwide by mid-2029.

High inflation, interest rates and supply constraints are being blamed for the slow progress. (Brendan Esposito/AAP PHOTOS)

Master Builders NSW executive director Brian Seidler said simply relying on an economic recovery to deliver the homes would not be good enough.

"All levels of government have acknowledged the challenges around planning, workforce, and productivity … we must ensure that momentum is maintained in these critical areas," he said. 

"Industry productivity has declined by 18 per cent over the last decade. State governments must expedite planning reforms to cut the excessive costs and long timelines associated with construction."

Approvals and completions have consistently lagged the 75,000 extra homes per year figure required to hit NSW's target in recent times.

The state government has set local councils a target of determining housing applications within 115 days of lodgement in the 2024/25 financial year.

But a 'league table' set up to try and hold councils accountable shows plenty are not hitting that target.

Mr Seidler said the federal government would need to expand the building and construction workforce to be any chance of reaching the 1.2 million-home target.

"We need innovative approaches, including better apprenticeship incentives, reskilling migrants already in Australia, and launching an international campaign to attract skilled tradespeople," he said.

 "Since the pandemic, build times for these projects have increased by around 20 per cent from approval to completion, while costs have surged by approximately 40 per cent."