Despite Lake Macquarie City Council's strong policy focus on housing supply and diversification, it's expected to fall short of reaching its designated target.
The council's draft Housing Strategy was placed on public exhibition last week.
In 2024, the National Housing Accord set the council a target of delivering 8000 new dwellings by mid-2029.
The draft Housing Strategy states that Lake Macquarie is expected to fall 1589 dwellings short of that target unless something changes.
Last week the Newcastle Herald reported there are about 5000 council-approved homes waiting construction in Lake Macquarie.
The projected shortfall arrives at a time when Lake Macquarie's rental vacancy rate is 1.1 per cent. That's below the NSW average of 1.4 per cent and the considered healthy range of three to four per cent.
The council's draft housing strategy also states that 37 per cent of rental households in Lake Macquarie are experiencing housing stress.
That's above Newcastle (33 per cent) and the Australian average (32.2 per cent).
The share of households feeling mortgage stress is 12.1 per cent, below the Australian average of 14.5 per cent.
Asked if the target of 8000 dwellings by mid-2029 was unrealistic, a spokesperson for the council said "the target was established through the National Housing Accord, which represents a shared commitment between the federal and state governments, local government, industry and the construction sector to increase housing supply."
"Council's role is to set the planning framework to ensure there is sufficient capacity in place to facilitate housing delivery while also protecting the livability of Lake Macquarie," the spokesperson said.
"Through recent planning reforms and ongoing engagement with industry, council is doing what it can to support delivery, recognising that the timing of construction is influenced by broader factors beyond council's control."
Lake Macquarie's population is growing by 2143 people each year and is forecast to increase from 225,000 in 2025 to 270,000 by 2046.
Labor mayor Adam Shultz has made housing a priority since his election in October 2024.
In April 2025 he fulfilled one of his election promises by hosting a housing forum at the Belmont 16s for 86 stakeholders in the industry to share ideas.
Since then, councillors have endorsed new policies to incentivise affordable housing by reducing developer contributions and to allow low-rise units and attached dwellings to be permissible on R2 Low Density Residential Zone and R3 Medium Density Residential Zone land.
In 2021, 84 per cent of private dwellings in Lake Macquarie were separate houses, about 10 per cent were semi-detached and five per cent were apartments.
"Most of our current housing supply is made up of single, detached housing," Cr Shultz wrote in the draft housing strategy.
"Diversifying our housing supply will help us respond to the long-term trend towards smaller households.
"We aim to increase affordability and help reduce the stress associated with the cost of housing.
"We have prioritised making the most of our current urban areas. More housing opportunities near existing amenities such as community hubs, public transport, parks and footpaths will encourage connected communities with enriching social and job opportunities close to home."
Morisset, Glendale, Charlestown and Belmont are identified as the strategic centres in the draft Housing Strategy, and Cockle Creek is classified as an emerging strategic centre.
