Last week, AMP chief economist Shane Oliver estimated that Australia had a cumulative shortage of at least 220,000 homes and possibly up to 300,000.
“Starting in the mid-2000s annual population growth jumped by around 150,000 people largely due to a surge in net immigration– see the blue line”, Oliver wrote.
“This should have been matched by an increase in dwelling completions of around 60,000 homes per annum but there was no such rise until the unit building boom of 2015-20 leading to a chronic undersupply of homes—see the red line”.
“The unit building boom and the slump in population growth through the pandemic helped relieve the imbalance but the unit building boom was brief and a decline in household size from 2021 resulted in demand for an extra 120,000 dwellings on the RBA’s estimates. The rebound in population growth post the pandemic then took property market back into undersupply again”.
“Up until 2005 the housing market was in rough balance. It then went into a massive shortfall of about 250,000 dwellings by 2014 as underlying demand surged with booming immigration. This shortfall was then cut into by the 2015-20 unit building boom and the pandemic induced hit to immigration”.
“But it’s since rebounded again to around 220,000 dwellings, or possibly as high as 300,000 if the pandemic-induced fall in household size is allowed for. The shortfall is confirmed by low rental vacancy rates”, Oliver wrote.
The shortages engulfing the housing market are also evident elsewhere.
The imbalance between supply and demand has seen rental listings plunge by 16.2% across the combined capital cities in the year to November 2025:
Source: Cotality
Overall rental listings across the combined capital cities are tracking at their lowest level on record for the month of November:
Source: Cotality
As a result, Australia’s rental vacancy rate has remained at a record low of just 1.5% over the past four months, down from 1.9% a year ago in November 2024.
The shortages also extend to the number of homes listed for sale, which plunged by 13.8% in the year to November:
Source: Cotality
As Justin Fabo from Antipodean Macro shows below, the total number of homes listed for sale across Australia is tracking around 100,000 below the average level between 2011 and 2019, despite the significantly larger population today:
In summary, the Hunger Games has gripped all facets of Australia’s housing market, which helps to explain the ongoing deterioration in affordability both to purchase and to rent.
