A diverse group of property stakeholders recently convened at the 2025 Sydney Property Think Tank to explore the compounding challenges facing Australia’s housing market.
The event, facilitated by legal firm Colin Biggers & Paisley and supported by partners such as Macquarie Bank and RSM Australia, focused on the intersections between construction costs, regulatory delays, and housing policy – and their broader impacts on property and insurance markets.
Ray White chief economist and Construction Forecasting Council chair Nerida Conisbee opened the event with a market overview highlighting a disconnect between supply and demand.
Despite reductions in interest rates, structural barriers such as elevated build costs and constrained labour availability continue to hinder development.
According to Conisbee, New South Wales delivered just under 46,000 homes in the past year – well below the estimated 57,000 required.
“Either house prices must rise to meet construction costs, or we need to find a way to build cheaper,” she said.
For property insurers, these supply-side issues raise concerns around insured value adequacy, project delays, and overall build quality – factors influencing premium pricing and claims exposure.
During a panel discussion moderated by Colin Biggers & Paisley partner Leanne Walker, experts including Pacific Planning’s Matthew Daniel and Centennial Property Group’s Jonathan Wolf addressed longstanding inefficiencies in the New South Wales planning system.
Daniel criticised the existing framework, saying planners often act more as gatekeepers than facilitators. He proposed that a basic understanding of development economics be incorporated into planning training programs to align public policy with commercial feasibility.
Wolf called attention to labour market constraints, suggesting that immigration settings need urgent reform to address skill shortages in the trades. He also noted that public infrastructure initiatives are drawing talent away from housing projects, compounding cost inflation and delivery lags.
Discussion turned to potential policy and technical responses to housing affordability. Modular construction and pre-approved design templates were flagged as opportunities to reduce costs and speed up delivery.
However, panellists acknowledged that these solutions still face implementation hurdles at the local government level.
The forum also examined inclusionary zoning – policies mandating affordable housing components in new developments. While some viewed it as a deterrent to private investment, others argued that increasing supply and reducing red tape would be more effective than imposing developer levies.
The implications of housing market dynamics are also evident in commercial property insurance. A recent Lockton update showed improving conditions for insureds, with insurers – especially international carriers – re-entering the market and contributing to surplus capacity. This has led to greater competition, better terms, and fewer discrepancies in shared placements.
Insureds who revisit their coverage strategies, reassess risk profiles, and explore alternative structures – such as higher self-retentions or diversified insurer panels – are achieving more favourable outcomes. The presence of new underwriting capacity, including from managing general agents (MGAs), is further reshaping how property risks are priced and distributed in Australia.
Complementing the macro-level discussion, the Helia 2025 Spotlight report examined micro trends among first-home buyers.
Despite affordability barriers, 68% of aspiring homeowners are pursuing strategies such as additional employment, delayed life milestones, and family assistance to reach ownership goals.
The report also revealed an increased reliance on Lenders Mortgage Insurance (LMI), with 48% of recent buyers using it to access the market.
Greg McAweeney, chief commercial officer at Helia, said LMI enables entry with deposits as low as 5%, providing a path for those without access to intergenerational wealth.
“With the Bank of Mum and Dad not always an option, LMI is proving a vital solution for aspiring home buyers,” he said.
Speakers at the Think Tank agreed that Australia’s housing supply gap and affordability challenges require coordinated responses across planning systems, skilled migration, and infrastructure investment.
These trends also intersect with emerging risks for insurers, particularly around property development timelines, rebuild costs, and underwriting assumptions.
