Australia set an ambitious target: build 1.2 million new homes by July 2029.
But the latest forecasts from Master Builders Australia reveal the country is drifting further from that goal, not closer.
The most recent industry forecasts show the expected shortfall has now grown to 180,200 homes, up from a 160,000 gap projected just months earlier.
In 2024-25 alone, 180,500 homes were started, almost 60,000 short of the Accord's annual target of 240,000.
Chief Economist Shane Garrett put it plainly:
Australians are crying out for more housing, but demand is being left unrealised. Projects are stalled by rising costs, low productivity and long build times. Without rapid reform, the activity needed to deliver 1.2 million homes will not materialise.
For investors, that shortfall may be a tailwind for ASX-listed companies that develop, build, and supply the Australian housing market.
Here's 3 ASX shares that could benefit.
Image source; Getty Images
James Hardie Industries plc (ASX: JHX)
James Hardie Industries is the world's leading producer of fibre cement building products and supplies a significant portion of the cladding, siding, and external building materials used in Australian residential construction.
The company has had a difficult year, with shares down sharply after organic net sales declined 2% for FY2026 as North American housing demand remained subdued and channel inventory normalisation weighed on volumes.
However, the FY2026 full-year result also contained reasons for optimism.
James Hardie reported net sales of US$4.84 billion for FY2026, up 25% year-on-year, supported by the contribution from the transformative AZEK acquisition, which added a Deck, Rail and Accessories division generating US$795.2 million in revenue and US$224.8 million in EBITDA.
Adjusted EBITDA for the full year reached US$1.27 billion, exceeding internal guidance, and management is targeting 4% to 8% pro forma adjusted EBITDA growth in FY2027.
As Australia's housing construction target creates years of sustained demand for new building materials, James Hardie's fibre cement products and its growing Deck, Rail and Accessories portfolio position it well to benefit from any recovery in residential construction volumes.
Stockland Corporation Ltd (ASX: SGP)
Stockland is one of Australia's largest residential land and housing developers.
The stock is arguably the most direct ASX play on the government's housing construction agenda.
The company operates one of the largest masterplanned community portfolios in the country, with developments in growth corridors across Sydney, Melbourne, Brisbane, and Perth that are specifically designed to deliver the affordable, family-oriented housing that the government's 1.2 million home target prioritises.
In Q3 FY2026, Stockland reported a 43% year-on-year lift in Masterplanned Communities sales and a 162% surge in Land Lease Community sales, underscoring the extraordinary demand the business is currently capturing.
The company is targeting 7,500 to 8,500 lot settlements in Masterplanned Communities and 700 to 800 homes in Land Lease Communities in FY2026, each with operating margins in the low 20% range.
Stockland is maintaining FY2026 guidance of 36.0 to 37.0 cents funds from operations per security and a distribution of 25.2 cents.
Furthermore, the company has partnered with EdgeConneX to develop data centres on its industrial land, adding a high-value new use case for its extensive land bank that complements its residential development pipeline.
In addition, the federal budget's negative gearing exemption for new builds creates a direct demand catalyst for Stockland's masterplanned community product.
This is because investors seeking tax-effective property exposure will increasingly favour newly built homes over established properties.
Mirvac Group (ASX: MGR)
Mirvac rounds out the trio as a diversified property developer with a growing residential pipeline and Australia's most advanced build-to-rent platform.
The company stands to benefit from both the structural housing shortage and the federal budget's new-build exemption to negative gearing changes.
These two together create a powerful demand tailwind for developers of new residential product.
In the first half of FY2026, Mirvac posted a 38% year-on-year lift in residential sales, with settlements up 22% and gross margins recovering from recent lows.
The company restocked its development pipeline with approximately 2,300 new lots during the half, ensuring it has the land supply to meet expected demand growth over the next three to five years.
Foolish takeaway
Australia's housing shortfall is not a short-term problem.
The combination of population growth, a structural undersupply of new dwellings, and a government policy environment that now actively incentivises new construction creates a multi-year tailwind for ASX-listed housing developers and building materials companies.
James Hardie, Stockland, and Mirvac each offer different risk and return profiles within the same theme.
Together they represent three ways to position a portfolio for what could be one of the most enduring investment tailwinds on the ASX over the rest of this decade.
