HOME construction in Australia is expected to rebound in coming years, driven by population growth, low unemployment and falling interest rates.

The Housing Industry Association predicts a steady rise in new home starts, led by detached housing, peaking in 2027.

Apartment construction is forecast to follow as market conditions improve.

Housing demand is continuing to grow along with the population, HIA chief economist Tim Reardon said.

However, structural issues such as land shortages, taxes and complex regulations continued to push up building costs, he said.

These pressures were limiting supply and contributing to rising house prices and rents.

Mr Reardon warned that without reform, long-term affordability and living standards would suffer, calling for action to secure housing opportunities for future generations.