A major federal-state government funding agreement has been announced with the aim of boosting housing supply and first home buyer opportunities.
Australia’s housing supply drive has taken a considerable step forward, with the Albanese and Malinauskas governments on Saturday (31 January) announcing an $801.5 million deal to unlock 17,000 new homes across South Australia, with almost 7,000 earmarked for first home buyers.
The deal is the first partnership under the federal commitment to support 100,000 new first home buyer dwellings nationwide by 2029.
Alongside dedicated first buyer projects, a further 10,000 homes will be built for the wider market, contributing to overall supply growth at a time of record housing demand.
The federal government will lend $534 million to South Australia, with the remainder of the $667.9 million support package to be delivered through direct grants.
This includes a $300 million loan for new water infrastructure in Adelaide’s northern suburbs, expected to unlock 4,000 homes and $50 million to fund civil works at Playford Alive, creating a first home buyer-only precinct of 400 homes.
Another $184 million will be invested to fund multiple urban renewal projects delivering 1,700 homes across metropolitan Adelaide.
The South Australian government has also agreed to match $134 million in federal funding for 750 houses for first home buyers.
Early site works are expected to begin in 2026–27, with first home buyers due to move in from 2027–28.
Prime Minister Anthony Albanese described the package as “a model for how we can work with states to get more homes built faster.”
He said the goal was “to make it easier for young people and first home buyers to achieve the dream of owning a home.”
Focus on speed and supply
South Australian Premier Peter Malinauskas said the deal was designed to accelerate construction and overcome supply constraints that had slowed housing growth.
“The only way we can take on this challenge is to unlock supply and do it quickly. What this program is all about isn’t just building more homes but getting on with it and doing it quickly,” he said.
“Our government is throwing everything at building more homes for South Australians.
“There are already more homes under construction in the state than at any point in history.”
The announcement forms part of the federal government’s $45 billion national housing plan, which also includes reforms to planning approvals, investment in trade training and apprenticeship incentives, and the Housing Australia Future Fund targeting 55,000 social and affordable homes.
Industry backs the initiative
The deal has drawn strong endorsement from building groups, which see the funding as addressing longstanding bottlenecks in housing delivery.
Master Builders Australia CEO Denita Wawn said it represented “vital support for civil and infrastructure works that help underpin local developments that are needed right now.”
She labelled the announcement “a much‑needed part of the housing puzzle” and said governments must now ensure “the workforce shortage and supply chain pressures” do not slow delivery.
Master Builders South Australia CEO Will Frogley said the agreement was “a massive win for South Australian builders” and praised the state government’s “decisive and proactive actions”.
“The best way to improve housing affordability is to increase supply,” he said.
The Housing Industry Association echoed similar sentiments and said a focus on infrastructure funding in this year’s federal budget would be crucial to get major projects “shovel ready”.
“This investment includes concessional loans and grant funding to support more homes for first home buyers delivered faster, which is timely given home ownership rates for those under 40 are at decade lows,” HIA managing director Jocelyn Martin said.
Martin said the investment targets “key last‑mile enabling infrastructure including roads, sewerage, water and power” – often what “holds many projects back from being delivered in a more‑timely fashion.”
Step toward national rollout as housing targets lag
The federal government said the South Australian agreement was the first of several state partnerships under the broader scheme.
It comes after the Australian Bureau of Statistics’ (ABS) Building Activity report for the 2025 September quarter captured that new home starts had rebounded, yet were still lagging behind the required pace needed to meet federal government housing targets.
The report also found that South Australia had only contributed 3,718 new home starts, well below the 13,415 new starts in Victoria, 12,153 in NSW, 10,869 in Queensland, and 5,742 in Western Australia.
The HIA has continued to stress that the volume of home commencements remains well below the 240,000 new homes per annum needed to meet the federal government’s National Housing Accord target of 1.2 million homes by 2029.
Cotality’s January 2026 Home Value Index report, released on Monday (2 February), showed that dwelling value growth in Adelaide had trimmed back to 1.2 per cent after December’s 1.8 per cent score, hitting $744,205, with 5 per cent quarterly and 9 per cent annual gains.
[Related: Housing starts climb, yet fall short of crucial target]
