The Housing Industry Association (HIA) has called on governments to ensure the growth of Australia’s data centre sector does not affect efforts to deliver more homes, following comments from the Prime Minister that housing should remain a key consideration as digital infrastructure expands.
HIA Chief Executive Industry and Policy Simon Croft said Australia would need both new housing and stronger digital infrastructure, but warned that increased demand for land, electricity, water and supporting infrastructure could create further challenges for housing supply.
“While data centres may play an important role in Australia’s economic future, governments must not lose sight of the country’s most urgent challenge: delivering enough homes for a growing population,” Mr Croft said.
The organisation said some housing projects in states including Victoria and New South Wales had faced competition from proposed data centre developments, with land previously considered for residential use being redirected towards technology infrastructure.
Mr Croft said data centre projects should not receive faster planning pathways while housing developments continue to face delays.
“Families looking for a home should not find themselves behind data centres in the queue for land, energy connections or essential infrastructure,” he said.
HIA said the issue was particularly relevant in expanding suburban areas and regional centres, where housing projects are already dealing with infrastructure constraints.
The group also raised concerns about the energy and water requirements of large-scale data centres, calling for careful consideration of how these demands are managed alongside community needs.
Mr Croft welcomed comments from the Prime Minister about data centres taking responsibility for their electricity and water use, saying this approach should be supported through government policy.
He said households had faced rising costs over time through changes to building standards and energy efficiency requirements designed to reduce resource use, while some large data centres could consume resources comparable to thousands of homes.
HIA said these pressures should be considered as Australia plans for future infrastructure needs, particularly as demand for artificial intelligence and digital services continues to grow.
Mr Croft said emerging technologies, including artificial intelligence, could provide benefits for the residential construction sector by improving productivity and supporting better ways of working.
However, he said governments needed to maintain a balanced approach when making decisions about planning, infrastructure and investment.
HIA said Australia should continue supporting innovation while ensuring the supply of homes remains a priority for a growing population.
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