Smarter incentives, more homes
11.03.2025 - 09:12
Mandala, in partnership with the Property Council of Australia, has released a landmark report examining the economic benefits of achieving the National Housing Accord's 1.2 million new homes target by the end of FY2029. Our analysis reveals current projections fall 40% short of this ambitious goal. Successfully meeting the target would deliver substantial benefits: reducing weekly rents by $90 in well-located areas, moderating price growth, generating $128 billion in economic activity, and supporting 368,000 jobs annually. While the Australian Government's $3 billion New Homes Bonus incentive scheme establishes a strong foundation, our research identifies opportunities to enhance its effectiveness. The current retrospective payment structure and high thresholds limit jurisdictional engagement with the scheme. Mandala recommends a refined approach including earlier payments, extending the program timeframe, doubling funding, improving transparency through robust reporting, and strengthening federal leadership.
Australia's housing affordability challenge continues to deepen, with the time required to save for a house deposit in capital cities increasing to over 10 years. This challenge stems from insufficient housing supply, with Australia having fewer dwellings per capita than the OECD average, and historically low vacancy in existing homes.
The Australian Government has responded by setting an ambitious target of 1.2 million new well-located homes by the end of FY2029, through the National Housing Accord. Currently, Australia is forecast to achieve 60 per cent of the National Housing Accord’s target, with an uplift of 462,000 homes needed to reach 1.2 million new homes.
Accelerating housing construction to achieve the 1.2 million target would have large impacts on housing affordability. Rental prices could be reduced by $90 per week in well-located areas and housing price growth would slow. Further, the construction would contribute $128 billion in economic activity over the five years and support 368,000 jobs each year.
The target is supported by the $3 billion New Homes Bonus, designed to incentivise more housing construction. However, stakeholder consultation and analysis of previous incentive payment schemes suggest that the New Homes Bonus could be better designed to improve its efficacy. The current retrospective payment structure and high threshold requirements make the scheme challenging for jurisdictions to engage with effectively.
With the exception of the ACT, no state or territory is projected to meet the scheme's threshold within its current timeframe, potentially undermining its effectiveness as an incentive for reform.
To optimise the scheme's impact, the Australian Government should consider:
- refining the scheme by bringing forward payments and extending its duration to seven years to enable jurisdictions to undertake longer-term reforms
- increasing the total value to $6 billion to reflect the scale of the housing challenge and ring fencing any unspent funding for future housing supply initiatives
- strengthening transparency through clear public reporting on progress and establishing forums to share insights between jurisdictions
- enhancing Australian Government leadership through establishing a Housing Sub-Committee of Cabinet and considering all available levers to support housing supply
These changes would help ensure the New Homes Bonus effectively supports the critical goal of improving housing affordability across Australia, while fostering greater coordination between different levels of government in addressing this complex challenge.
Read full report here.
Read our latest posts
The essential infrastructure: How Australian banks power the economy
Mandala's latest research, prepared for the Australian Banking Association, examines the often-hidden role Australian banks play in supporting households, businesses and the broader economy. The research finds that banks are deeply embedded in the financial lives of Australians - as lenders, as community investors, through the jobs they generate and increasingly as assets owned by Australians themselves through shares and superannuation. From financing homes and small businesses to supporting regional communities through hardship and disaster, the report builds a picture of a sector whose success is broadly shared across the Australian population.
17 Jun, 2026
The threat of climate change to the US insurance industry
This joint report by the Coalition for an Insurable Future and Mandala Partners examines how climate change is undermining the stability of the US home insurance market. Homeowners insurance premiums have risen 38% since 2021, outpacing both inflation and wage growth, while 1 in 7 owner-occupied homes are now uninsured. Climate risk could push national premiums 35–107% higher by 2050, leave an additional 1.5–2.5 million households without cover by 2035, and cost the broader economy $1 trillion. The aggregate cost could rise to over $3 trillion by 2050. A preliminary assessment of state-level policy responses across California, Florida, Louisiana, New York and Colorado finds that effectiveness is mixed, and that the burden of costs falls primarily on homeowners, insurers and taxpayers, rather than on the sources of the underlying climate risk.
10 Jun, 2026
Surf, Shop, Save 2.0: How online retail is helping ease cost-of-living pressures in Australia
Mandala's latest research, commissioned by Amazon, examines how online channels are easing cost-of-living pressures for Australian households. The research analysed the prices of more than 95,000 products sold through online channels, constructing an Online Channel Index (OCI) to track how online prices have moved since 2019. The OCI has deflated 6 percentage points over that period, while the comparable CPI basket has risen 8 percentage points, a reflection of the competition and efficiency effects that online channels bring to the broader retail market. These effects are expected to save the average household $1,414 in 2026, roughly six weeks of grocery spending, with total savings of $7,766 since 2019. Lower-income households gain the most as a share of income. Online sales now account for 12 per cent of Australian retail, and some of the country's largest retailers are also leading omnichannel players.
22 May, 2026
Accelerating Housing Delivery Through Risk Capital Approaches
Mandala’s latest research, prepared with CBRE, aims to understand the benefits of shifting public-sector subsidies from grant dependence to risk capital co-investment. Risk capital is the deployment of sub-market loans to housing developments and has been applied in Greater Manchester to halve the effective public cost of subsidisation. As England grapples with a viability crisis, risk capital can provide an effective policy solution. This report models the deployment of £8.5bn from the National Housing Bank as risk capital across England. The report finds that deploying this capital within existing fiscal rules could unlock 94,000–104,000 additional homes by 2031, depending on the deployment strategy. This could crowd in £22bn in private investment, generate £5.6–£5.8bn in cumulative GDP growth, and support 71,000–73,000 jobs across England while recovering public capital with interest.
20 May, 2026