National disaster: “Australia’s housing crisis is going to get worse”


On Saturday, I was interviewed by Radio 2GB’s Luke Grant, where I explained the drivers behind Australia’s falling inflation.

I also ran through the latest dwelling approvals and housing finance data, which I described as a “national disaster” which infers that “Australia’s housing crisis is going to get worse”.

Below are highlights of the housing discussion, along with key charts supporting the discussion.

Edited Transcript:


This has turned into a national disaster to be quite honest.

On Thursday, the Australian Bureau of Statistics released its dwelling approvals data for December. What it basically said was that approvals have fallen to 162,000 last calendar year in 2023, which is the lowest in more than a decade.

Dwelling approvals

It’s 78,000 less than the Albanese government’s new home building target, which is 1.2 million over 5 years or 240,000 homes a year. We’ve got 162,000 approvals when population growth is running at about 620,000.

Historical NOM

So, it’s not nearly enough, and all it tells you is that given this historically high immigration, Australia’s housing crisis is going to get worse and rental inflation is going to remain high.


We are going to have more homelessness and more people being pushed into share housing.

And there was some other data that came out on Friday, which was the new home finance statistics from the ABS. That also crashed. The number of loans to build a new home or to buy a new home crashed remained at levels that are basically close to the lowest in history:

Lending for the purchase or construction of a new home

Chart by HIA


So, the whole supply side of the housing market is an absolute disaster zone. At the same time, we’re running the highest immigration intakes in history – the highest currently, and this year is forecast to be the second highest – when the supply side is completely stuck, which means we’re going to have a worse housing crisis.

It’s an absolute national disaster. It absolutely is, and that is something the government could have had control over.

They decided to open the floodgates, and they didn’t bother with building infrastructure or more housing.


Everyone laughs at China because they do a “build- it and they will come approach”. They basically build these empty cities and whatever. We do the complete opposite. We import the people and then we pretend to worry about providing the housing and infrastructure for them later.

That’s basically the reason why we’ve got rental inflation running at nearly 7.5% according to the ABS, and it’s one of the reasons why if you’re a renter, your cost of living has gone through the roof, why we’ve got rising homelessness and people living in group housing.

So, it’s an absolute disaster and it’s another reason why the immigration system is completely dysfunctional, because the federal government just brings everyone in. They collect a bit of extra tax from it. They say it’s all good. But they don’t worry about supplying houses, infrastructure, services, water supplies, and all the other stuff that goes with it.


That’s one of the reasons why we’ve had this sort of 20-year decline in living standards in Australia because we’ve been running this policy for around 20 years.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.