Australian unit & apartment rents will continue to rise strongly in 2024 as record immigration-driven demand collides with falling rates of construction.
The latest dwelling approvals data from the Australian Bureau of Statistics (ABS) showed that the number of units & apartments approved for construction fell to just 64,200 in the year to October, which was around half the 2016 peak:
High-rise unit & apartment approvals registered an even deeper decline, falling by more than half from the 2016-17 peak:
Meanwhile, Australia’s population is growing at a record pace, with Wednesday’s ABS national accounts inferring a population increase of 638,000 in the year to September:
In turn, rental vacancy rates have collapsed to record lows and rents have soared across the capital cities.
This week, Charter Keck Cramer (CKC) Research added to the pain, forecasting that apartment construction will remain soft all the way to 2027:
CKC associate director, Richard Temlett, said that “projects must be feasible to proceed”.
However, there are some 156,000 apartments nationwide that are approved and shovel-ready, but are not being built because of higher building costs, labour shortages, higher financing costs (interest rates), and buyers being unwilling to commit to pre-sales.
The upshot is that Australia’s housing shortages will worsen, driving rents higher and forcing more Australians to live in share housing or to become homeless.
This decade is shaping up as an unmitigated disaster for renting Australians, underpinned by the Albanese government’s record immigration program.