New home construction may be at a decade low, but residential property investors have reason to stay optimistic.

The Housing Industry Association (HIA) believes smart policy changes could reignite growth and help Australia meet its national housing targets.

Only 168,050 new homes broke ground in 2024, well short of the 250,000 needed annually to reach the federal goal of 1.2 million homes by 2029.

But HIA Chief Economist Tim Reardon says investors should look beyond the slump.

“We’re at the bottom of the cycle, but with the right support and smart policy, the recovery will come,” said Mr Reardon.

“Investor demand remains strong, and the industry needs to be ready as interest rates eventually ease.”

HIA is advocating for “easy-win” solutions, such as removing lenders mortgage insurance for eligible buyers and offering targeted incentives to encourage first-home buyers to build new properties rather than purchase existing ones.

For investors, this shift could open up more opportunities in off-the-plan and new housing developments.

Long-term changes to land supply, planning approvals, and infrastructure funding are also critical to improving housing stock and rental yields.

“If sustained, these reforms will ease affordability challenges and unlock future housing supply,” Reardon added.