The Albanese government will go to the next election with a worthy $32 billion worth of housing programs – and next to nothing to show for it.

Tenants will still be squeezed by high rents; mortgage holders will still be paying much more than they once hoped; and first home buyers will still face the daunting hurdles of high deposits and unaffordable repayments.

Which opens the way, either before the election, or in negotiations over a possible hung parliament afterwards, for popular but flawed silver bullet solutions.

The Coalition proposes to release super for home buyers; the Greens argue for a rent freeze; and many – most eloquently the Greens but also key crossbenchers and a strong cohort within Labor ranks – want changes to negative gearing and capital gains tax.

The debate over the taxation of housing has been revived by senators Jacqui Lambie and David Pocock, by Westpac chief economist Luci Ellis and, most recently, by the government’s National Housing Supply and Affordability Council in its inaugural State of the Housing System Report.

‘‘A gradual transition to a more consistent (tax) system across tenure types may contribute to a more equitable housing system,’’ the report says.

Today’s graphic, created from ABS data by Ray White Group chief economist Nerida Conisbee, shows how important private investors, supported by tax arrangements, are to Australia’s rental stock.

Changes over the next year will help housing markets before the election. A reduction in immigration, if it happens, would ease demand on rental markets.

Borrowers will benefit from the stage three tax cuts. Sameer Chopra, the head of research in the Pacific for real estate heavyweight CBRE, estimates that for a double-income family the July 1 tax change will provide another $110,000 in borrowing capacity.

And a dribble of housing openings will take place. In the past two months tenants have moved into 228 social accommodation homes in the Melbourne suburb of Prahran and into 130 affordable apartments in Sydney’s Macquarie Park, both part-funded by the Commonwealth’s Housing Australia and their respective state governments.

Nevertheless, the Albanese government approach, which is to increase supply, while correct, will not deliver enough homes to make a difference before the next election.

‘‘Housing affordability is expected to deteriorate further over the forecast horizon,’’ the State of the Housing System concludes.

Similarly, Treasury’s Budget Paper 1, which reported that dwelling investment declined in both 2022-23 and 2023-24, forecast no improvement in 2024-25.

‘‘Interest rates and elevated construction costs are weighing on the demand for new housing,’’ Treasury says.

The cycle will turn, with dwelling investment expected to jump by 6.5 per cent in 2025-26, but after the next election. ‘‘The government’s $32 billion housing plan will deliver the biggest investment in over a decade, enable construction of more homes, reduce red tape and planning hurdles, train the necessary workforce, and support Australians into home ownership and those in the rental market,’’ the budget paper says.

It’s a targeted suite of mostly supply-side programs, supported by many experts, and with a focus on the social and affordable housing sectors, which have been neglected for decades, and on the infrastructure and construction capacity needed to deliver new housing.

But it will take time.

Two of the landmark initiatives, the Housing Australia Future Fund Facility and the National Housing Accord Facility, which will eventually support the construction of 40,000 social and affordable homes, have been delayed in parliament, and the first tranche of funding – just finance approval, not even a start on construction – is not due to be announced until the September quarter.

Adding to the Albanese government’s challenge is a program, full of acronyms, like HAFFs, and NHAFs, which in my experience most lay people, and quite a few experts, simply don’t understand.

Eleven days before Treasurer Jim Chalmers handed down his third budget, the chairwoman of the National Housing Supply and Affordability Council, Susan Lloyd-Hurwitz, delivered the State of the Housing System Report.

Lloyd-Hurwitz says she is encouraged by the ‘‘concerted efforts’’ of the government and the ‘‘raft of reforms’’, particularly to planning, announced by states and territories.

Nevertheless, she says, the Albanese government is ‘‘unlikely’’ to meet its ‘‘suitably ambitious’’ housing target of 1.2 million new homes in the five years starting in July, ‘‘without further significant effort’’.

Lloyd-Hurwitz says ‘‘although this crisis is at its heart one about insufficient supply, there are many other contributing factors … (and) we should resist the temptation to see any one of these factors as the driving force’’.

She notes ‘‘the resumption of immigration at some pace, planning system weaknesses, rising interest rates, skill shortages, elevated construction company insolvencies, weak consumer confidence, cost inflation and low productivity in the construction sector’’.

The budget, to its credit, does not try for a silver bullet solution but does aim to address a number of those challenges.

Master Builders Australia chief executive Denita Wawn welcomes many of the budget initiatives but warns the industrial relations landscape continues to hold the industry back. She says the new industrial relations laws will cut almost 8000 jobs, and reduce new housing supply by 15,000 homes, over the next five years.

Damon Roast, the construction economist at cost management and advisory firm WT, backs the training initiatives to boost construction capacity – such as the 15,000 fee-free TAFE and VET places from January 2025 – but notes the additional trades will not be in place for several years.

‘‘On a three-year view, cost escalation in the building sector is set to increase around 5 per cent per annum across major capital cities,’’ he says.

The industry has welcomed the more than $5 billion in infrastructure funding, particularly for western Sydney and south-east Queensland.

Tom Forrest, the chief executive of developer lobby Urban Taskforce, calls the Albanese government’s commitment to funding the roads and water that underpin new housing a ‘‘Eureka moment’’.

‘‘The states need to build on this by removing, or reducing, a range of state government taxes and levies on new housing,’’ he says.

In particular, the NSW government needs to reconsider two new levies, the Sydney Water Development Servicing Plan and Housing and Productivity Contribution, which, on modelling by the Urban Development Institute of Australia, will add up to $80,000 to the cost of a new lot in western Sydney.

Those issues underline the housing challenge. All three tiers of government have much to do, but more than 90 per cent of the new homes needed will only happen if their development, construction and ownership is feasible for the private sector.

Robert Harley is a former property editor of The Australian Financial Review. He is at