This week was another unmitigated disaster for Australian housing supply, which continues to tighten amid the strongest population growth in the nation’s history.
Over the 2022-23 financial year, Australia added just 169,500 dwellings to the nation’s housing stock (net of demolitions), which was well below what was required to house the record 626,000 growth in Australia’s population.
On Tuesday, the Australian Bureau of Statistics (ABS) released dwelling approvals data for the September quarter, which revealed that only 164,300 dwellings were approved for construction through the year:
This run-rate is around 75,000 fewer than the 240,000 new homes required to meet the Albanese government’s target of building 1.2 million homes over five years.
The next chart shows that dwelling approvals, commencements, and completions have each collapsed to around decade-lows at the same time as the nation’s population is exploding:
On Thursday, the ABS released more bad news with the number of loans issued for the purchase and construction of new homes remains at around 20-year lows:
The prognosis from the Housing Industry Association (HIA) was dire:
“There were only 4,282 loans issued for the construction or purchase of new homes in September, leaving the last three months 27.7 per cent lower than during the same quarter last year”.
“Lending activity has been weighed down by the fastest increase in interest rates in a generation. This is drying up the pipeline of new home building work across the country”.
“This is consistent with yesterday’s data that showed new house building approvals around decade lows”.
“This low volume of lending and approvals will produce a decade low volume of new housing starts in 2024″.
There is no beating around the bush here. Australia’s rental vacancy rate is already at a record low of just 0.9% across the combined capital cities:
Source: CoreLogic
The surge in immigration demand amid crashing new home construction can mean only one thing: an even tighter rental market, soaring rents, and more Australians being pushed into financial stress and/or being forced to live in group housing or becoming homeless.
The Albanese government must, as a matter of urgency, slash the rate of net overseas migration to a level that is below the nation’s ability to build homes and infrastructure.
Otherwise, Australia’s housing crisis will continue to worsen.
