Prime Minister Anthony Albanese and the premiers are promising to build 1.2 million houses in Australia over five years, up from one million 10 months ago, starting next year.

Or rather, they won’t build them – they’ll aspire to have them built and take credit for them if they are, and hope we forget about it if they’re not, which is a fair bet.

In 1983, Bob Hawke promised to get housing starts to 160,000 per annum within three years, and then, in 1984, that promise was quietly cut to 145,000. Housing starts began falling immediately after the 1984 election.

Housing completions did actually get to 162,376 within six years, in 1989, but total dwellings built during 13 years of Labor totalled 1.75 million, or 135,000 per year.

In 2007, Kevin Rudd promised to build 100,000 houses and increase demand by five times that number by helping the many first-home buyers with their deposits.

In the 10 quarters that Rudd was PM, from 2007 to 2010, 367,215 houses were built in Australia – 19,529 fewer than the previous 10 quarters, so maybe not. But nobody followed up.

Aspiration is key

In fact, most aspiring PMs talk about housing, often with promises, and they’re not held to account. The aspiration is the thing.

After clearing his throat with the promise of 30,000 houses over five years with the Housing Australia Future Fund (HAFF), Anthony Albanese slapped one million over five years on the table last October with a new National Housing Accord.

That was described in the document as an “aspirational target”, which seems to mean that it’s not supported by any actual policies. It’s an aspiration, but let’s face it, we all need one of those.

At that point, the most recent housing completions data from the ABS was for the June quarter, during which 43,649 dwellings were built.

Run the numbers

If that rate continued for five years, or 20 quarters, then 872,980 houses and units would be built, so the one million over five years, or 50,000 per quarter, would represent an increase of 14.6 per cent.

In the five years before the pandemic, 1,028,480 dwellings were built, so we’re just talking about getting the amount of house-building back to what it was pre-COVID.

Awkwardly, completions fell to 38,710 in the March quarter of this year, so that October aspiration would now represent an increase of 30 per cent before last week’s national cabinet meeting.

But after the meeting and the new National Housing Accord, that was upped to 1.2 million homes over five years, which is now a 55 per cent increase over the current rate, and 17 per cent more than the pre-COVID five years.

The extra 200,000 houses, which means a new target of 240,000 per year, or 657 new houses per day, are to be achieved with a bounty of $15,000 per house paid to state or local governments for releasing land, capped at $3 billion.

There’s no research that has been published to support the idea that a reward of that amount and paid to other levels of government will do the trick. Maybe someone in Treasury has it on a spreadsheet and did a whiteboard at national cabinet.

Or more likely they worked backwards from $3 billion, because that’s what Treasurer Jim Chalmers said he could manage, and then they decided that 100,000 doesn’t sound like enough, and 500,000 would mean the reward was only $6000, so 200,000@$15,000 it is.

Promises, promises

And that precisely calculated 200,000 number goes on top of a rubbery aspiration of one million.

Anyway, state and local governments don’t actually build houses, developers do. The governments will release the land, and presumably they won’t get paid the 15 grand for just releasing the land, but only when a house or block of units gets built on it, although that’s not entirely clear.

Will $15,000 entice governments to release more land than they would have anyway under the National Housing Accord they all signed last year?

In October 2022 they agreed, among other things, to “undertake expedited zoning, planning and land release to deliver the joint commitment on social and affordable housing in well located areas, including looking for immediate opportunities to free up well located state land, for example in and around train stations and TAFE campuses including for affordable housing”.

Presumably 15 grand per lot will result in more expedited zoning, planning and land release. Money talks!

But will the new bounties make any difference to a developer who must decide whether to take the risk and build houses on these expedited lots?

Maybe, possibly … who can tell

That’s hard to see. Maybe the state and local governments could share the bonus with the developers 50/50. But really, would a $7,500 cash subsidy make much difference to the decision to build a $600,000 house and land package? Or even the entire $15,000?

Admittedly housing is a low margin business, so it’s possible that giving that full bounty to the developer will get a project across the line.

In any case, if decades of housing promises have taught us anything, it’s that the aspirations of prime ministers and premiers are largely irrelevant.

Ever since Robert Menzies killed large-scale public housing dead, housing is simply a market, and homes get built when developers and builders think they’ll make a buck. And let’s face it, most of the time they haven’t got a clue about that.

It’s true that land has to be made available for that to happen, and maybe state and local governments are so hungry for cash these days they’ll do anything to make $15,000 – even destroy their own re-election chances by annoying the NIMBYs who elected them with apartment towers sprinkled through the leafy suburbs.

But I doubt it. It might have to be a stick, not a carrot.

Alan Kohler writes twice a week for The New Daily. He is finance presenter on ABC News and founder of Eureka Report.