New data shows Canberra is on track to achieve national housing target

However, the association says the housing forecasts are dependent on an easing of supply constraints and a boost to the local construction workforce.

The federal government's National Housing Accord includes a target to build 1.2 million new homes across Australia over five years from mid-2024.

While explicit targets for each state and territory have not yet been finalised, the Master Builders Association says the ACT is the jurisdiction "best placed to meet its likely target".

The association forecasts work will begin on 24,370 new homes in the ACT during the lifespan of the housing accord.

The positive outlook comes after one of Australia's worst quarters for home building in more than a decade.

Data by the Australian Bureau of Statistics shows construction starts across all dwellings fell 10.4 per cent in the September 2023 quarter to 37,116 dwellings.

The Master Builders Association's latest forecast report states new home starts across the ACT fell 31.7 per cent in the 2022-23 financial year to 3990 dwellings.

The association expects a correction this financial year and has forecast new home starts to rise 31.8 per cent to 5260 dwellings.

Dwelling starts are forecast to dip in the 2024-25 financial year to 4080 homes, before steadily rising over the following years.

Apartments and townhouses will make up the majority of new dwelling starts over the next five years.

By 2028-29, high-density dwellings are expected to account for about 70 per cent of all new homes started in the ACT, a similar proportion to today's figures according to the report.

Master Builders Association of the ACT CEO Michael Hopkins said an easing of inflation and potential interest rate cuts would lead to a "more favourable investment market".

However, workforce shortages continued to be the biggest challenge standing in the way of increasing supply, Mr Hopkins said.

"The ACT government's priority should be growing the local building and construction workforce," he said.

The association estimates 7000 more construction workers will be required in the ACT by November 2026 to reach building targets.

"The ACT government needs to urgently address apprentice funding which remains at the lowest level of any state or territory for plumbing and carpentry apprenticeships," Mr Hopkins said.

Mr Hopkins also cited a "high regulatory burden" as a roadblock for the industry.

Union bargaining negotiations under way in the ACT and the full impact of the "closing the loopholes" legislation were also not factored into the forecasts, Mr Hopkins said.