Mixed Zoned Development
Prepared By Vanessa Rader Ray White Group Head of Research
The 2026 Federal Budget takes a more deliberate aim at the supply-side constraints that have held back housing delivery across Australia than previous budgets have managed. For both residential and commercial property markets, the measures announced signal a shift in thinking, from stimulating demand to removing the physical and workforce barriers that stop projects from proceeding in the first place.
basic connections to essential services. The Australian Local Government Association, which has advocated for this type of funding since its 2024 housing report identified a major shortfall in enabling infrastructure needed to support 1.2 million new homes, welcomed the commitment as a significant step forward. Councils have long argued that communities cannot continue absorbing the cost of growth infrastructure without federal support, and this Budget acknowledges that directly. For residential developers, serviced land is the prerequisite for everything else. For the commercial property market, the flow-on effects are equally real. Residential growth corridors supported by enabling infrastructure generate demand for neighbourhood retail, medical facilities, childcare, and industrial logistics assets serving new communities. The $500 million regional allocation is particularly relevant in areas where population decentralisation is driving housing demand beyond the major capitals, and where the gap between approved development and serviceable land has been most acute. THE WORKFORCE PIPELINE The Budget also addresses the construction workforce, and this matters as much for residential delivery
ENABLING INFRASTRUCTURE: THE RIGHT PROBLEM TO SOLVE
The strongest measure in this Budget for property is the $2 billion Local Infrastructure Fund, providing funding via states and territories to local governments and state utility providers for housing-enabling infrastructure, including local roads, water connections, power, sewerage and drainage. Up to 65,000 homes are expected to be unlocked over a decade, bringing the government's total investment in housing enabling infrastructure to $6.3 billion since coming to office. Critically, the funding is contingent on states committing to productivity reforms in the housing sector, including faster and simpler approvals, releasing more land ready for construction, and delivering a simpler National Construction Code. The government estimates these regulatory reforms could support tens of thousands of additional homes and deliver up to $3 billion per year in regulatory savings. This is a better-targeted housing measure than demand- side assistance because it goes directly to the physical barriers that stop residential projects from proceeding. Homes cannot be built if the land is not serviced. Developers can have approvals, finance, and willing buyers, and still find a project unviable if the site lacks
4 – May /June 2026
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