NAB warns Australia's housing crisis will take 'a generation' to fix as big banks unite behind a supply push

NAB chief economist Sally Auld says Australia's housing problems have been building for so long that fixing them will take "a generation", not a single budget cycle. Her comments landed the same week a Senate committee examining intergenerational housing inequity heard that Australia's big four banks are unanimous on one point: the country needs a lot more homes built, and quickly. For first home buyers watching prices, rates and grant deadlines month to month, it is a reminder that some of the forces shaping this market will not resolve on any short timeline.

What NAB is forecasting

NAB is forecasting a peak-to-trough decline in dwelling prices of approximately 7% across the combined capital cities, equivalent to a fall of roughly 5% across the 2026 calendar year. On paper, a price fall sounds like good news for buyers trying to get into the market. Auld's point is that it is not a fix. A modest correction in prices does not undo years of housing supply lagging population growth, and it does not change the deeper affordability gap between household incomes and the deposit and repayment levels needed to buy.

This lines up with a wider theme this year: several major banks have already revised their 2026 price forecasts downward, and market commentary has shifted from "when will prices rebound" to "how long will this correction run". A price fall changes the entry point, but it does not automatically make a purchase affordable if borrowing capacity is falling just as fast.

Why the banks are all pointing to supply

The Senate committee inquiry heard evidence that Australia's four largest banks agree on the core structural problem: not enough homes are being built relative to demand. Some of the context presented to the inquiry:

• Rental households are growing: there has been roughly a 20% jump this century in the number of Australian children growing up in rental homes, with that group experiencing an average of six house moves by age 14.
• Social housing has shrunk as a share of the market: the proportion of households in social housing has fallen from around 4.9% in 1981 to about 3.8% by 2021, even as the overall population has grown substantially.
• Affordability stress is rising: housing affordability stress has become a more common reason people seek help from homelessness services, growing from around 23% of cases a decade ago to roughly 36% more recently.

None of this points to a quick fix. Lenders, policymakers and economists broadly agree that sustained supply growth over many years is what actually moves affordability, alongside the deposit and grant schemes that help eligible buyers bridge the gap in the meantime.

What this means for first home buyers

A "this will take a generation" headline can feel discouraging if you are trying to buy in the next year or two. The practical takeaway is narrower than the headline suggests:

• Don't wait for a full fix before acting. Structural supply reform plays out over years to decades. Your own timeline for saving a deposit, checking scheme eligibility and assessing borrowing capacity operates on a much shorter horizon, and is worth working through now regardless of the macro picture.
• A price correction can be an opening, not a trap. If prices in your target area are easing, it may be worth re-checking what a property at today's price would actually cost you to hold, rather than assuming lower prices always mean better value.
• Government schemes still matter most in the short term. While supply-side reform is a long game, deposit guarantee schemes, stamp duty concessions and grants remain the tools available right now to reduce how much cash you need upfront.

As always, a lender or mortgage broker can assess your personal circumstances and talk through how a changing price environment affects your specific application. These figures are general market commentary, not a forecast of what will happen in your suburb or to your finances.

Run the numbers

Use these tools to see how a shifting price environment and current scheme settings apply to your own situation:

• Borrowing Power Calculator - work out roughly how much you could borrow today, and how that changes if prices or rates move
• Grant Stacker - see which federal and state grants, concessions and guarantee schemes you may be eligible for in your state
• Rent vs Buy Calculator - compare renting against buying now versus waiting, based on your own numbers rather than headline forecasts
• Interest Rate Shock Tester - check how your repayments would hold up if rates move again before you settle