The ACT and federal governments have struck a deal to build 4900 new homes in Canberra, including more than 1700 set aside for first home buyers.

The agreement makes the ACT the second jurisdiction to partner with the Albanese government’s plan to deliver up to 100,000 homes for first home buyers nationwide.

Under the deal, the Commonwealth will provide $250 million for infrastructure to support new housing developments across the territory.

Projects include funding for developments in Kingston, Weston Creek, Molonglo Valley and Ginninderry, with works ranging from powerline relocations and water infrastructure to estate development and landfill remediation.

The funding is expected to support hundreds of homes in each location over the coming decade, with some projects extending through to 2034.

The Property Council of Australia has welcomed the announcement, saying it would help address supply constraints.

ACT and Capital Region executive director Ashlee Berry said increasing the number of homes was key to improving affordability.

“This announcement is a positive step toward getting more first home buyers onto the property ladder by increasing the number of homes that can actually be built,” she said.

“We know first home buyers are being squeezed by high costs and limited choice. The most effective way to ease pressure is to deliver more homes, in the right locations, supported by the infrastructure needed to bring them to market.”

Ms Berry said investment in enabling infrastructure would help bring approved projects to completion.

“Too often, housing projects are approved but stalled because the enabling infrastructure isn’t in place,” she said.

Master Builders ACT also backed the deal, highlighting the economic benefits and ongoing housing shortfall.

Chief executive Anna Neelagama said investment in construction had broader flow-on effects.

“Every dollar spent on building and construction translates to $2.50 across the economy,” she said.

“Master Builders’ recently released forecasts predict a 1240-home shortfall against the ACT’s share of the National Housing Accord. The industry appreciates these proactive steps towards closing that gap.”

The initiative forms part of the federal government’s broader housing plan, which includes support for social and affordable housing, training for construction workers and shared equity schemes.