The goal was set in 2016 as part of social housing reforms but figures show as of late 2021, stock had only increased by 1996 dwellings.
Opposition housing spokeswoman Rose Jackson asked Planning Department Secretary Michael Cassel about the shortfall at a parliamentary budget estimates hearing on Monday.
"We're nowhere near delivering, are we?"she asked.
Mr Cassel agreed.
"In simple (terms), no," he said.
"I don't think those numbers will be met. And based on continuing lower yields, I think those programs will struggle."
The failure was in part due to planning approvals taking longer than expected, such as in inner Sydney's Waterloo, where a development had been stuck at the planning stage for four years, he said.
A new forecast was expected by Christmas.
More than 45,000 people are on the state's social housing waiting list, with expected times exceeding 10 years in Liverpool, Parramatta, Canterbury and Byron Bay
Building 5000 new homes every year for ten years would reduce the waiting list to about 14,000 by 2031, St Vincent de Paul Society modelling suggests.
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