Australia’s population is projected to reach 31.5 million by 2035–36, according to the 2025 Population Statement released by the federal government.
Even with growth slowing, that means more than 300,000 extra residents a year at a time when new home building is running well below national targets, adding further pressure to an already stretched housing system.
Published annually by the Centre for Population, the statement tracks demographic trends to help governments plan housing, infrastructure and services as the population changes.
Population growth is forecast to ease 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 expected to add more than 300,000 people a year through the latter part of the decade, realestate.com.au reported.
Net overseas migration – the main driver of growth – is estimated to have fallen to 306,000 in 2024–25, close to half its post‑COVID peak and lower than previously forecast. It is expected to moderate further to 260,000 in 2025–26 and decline again over the forecast period.
Growth will remain uneven across the country. Western Australia is forecast to be the fastest‑growing state in the near term, with its population rising 1.8% in 2025–26. Over the next decade, Victoria, Queensland and Western Australia are projected to grow fastest, while New South Wales is expected to remain the most populous state, reaching 9.6 million people – around 30.6% of the national population – by 2035–36.
The projections land as governments work to meet ambitious home building targets under the National Housing Accord, which aims to add 1.2 million new homes between July 2024 and mid‑2029 – roughly 240,000 new dwellings a year.
However, just 168,050 dwellings commenced construction nationally in the 2024 calendar year, Australian Bureau of Statistics (ABS) data shows, underscoring the scale of the supply gap.
Treasurer Jim Chalmers said progress had been made but acknowledged more work is needed.
“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,” Chalmers said.
Recent Housing Industry Association (HIA) analysis also found Australia remained well short of its housing supply needs as incomes and population continue to grow.
HIA senior economist Tom Devitt (pictured) said population growth was still outpacing housing delivery.
“This is the central challenge facing the housing market in 2026,” Devitt 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 persistent shortfall, the latest ABS building approvals data suggests early signs of momentum. Over the 12 months to November, total approvals reached 193,299 new homes – more than 20,000 higher than a year earlier and the strongest result in more than three years. However, this remains well short of the 240,000 annual builds needed, and not all approvals will translate into completed dwellings.
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