Australia’s “grim” housing crisis could get much worse than expected, as the country faces a deficit of more than 100,000 homes over the next four years.
The National Housing Finance and Investment Corporation’s (NHFIC) third flagship State of the Nation’s Housing 2022-23 research report said there will be a shortfall of around 106,300 dwellings (cumulative) by 2027 and a shortfall of around 79,300 in the supply of new homes by 2033 due to the rapid return of population growth and the fastest interest rate hikes.
The Centre for Population estimated net overseas migration to increase by 268,000 between 2022 and 2024 – that plus the rapid cash rate increases were “undermining residential construction feasibilities and weakening the pipeline of new housing,” the report found.
“The rapid return of overseas migration together with a supply pipeline constrained by decade-high construction costs and significant increases in interest rates is exacerbating an already tight rental market,” NHFIC CEO Nathan Dal Bon (pictured above left) said. “NHFIC analysis shows housing affordability and supply are likely to remain challenging for some time, underscoring the need for a holistic approach to mitigate the housing pressures Australians are facing.”
NHFIC also expected a shortage of apartments and multi-density dwellings for rent over the medium term, as net additions of apartments and medium-density dwellings such as town houses were projected to be about 40% (around 57,000 a year) less than the levels seen in the late 2010s.
According to NHFIC estimates, around 331,000 households were in rental stress and 46,500 households were experiencing homelessness. Housing need across the country ranged from 208,200 households in highly acute rental stress to 577,400 households under less acute rental pressure.
Property Council CEO Mike Zorbas (pictured above right) said the NHFIC research pointed to a widening national housing gap.
“This emerging 79,300-home deficit is a grim warning,” Zorbas said. “It reminds us that state, territory, and local governments simply have to lift their run rates on housing supply across the at-market, key worker, and social housing spectrum.
“We also need to urgently move the housing needle by creating the right investment conditions for new build-to-rent housing, purpose-built student accommodation, and retirement living communities.
“We need this for our existing population and to continue to attract the skilled migrants and students who support our education sector and bridge the huge gaps in our mining, construction agricultural and retail workforces nationally.”
The Property Council chief said the analysis provides more reason to urgently revive and support the passage of the Australian government’s legislative agenda on housing, including the Housing Australian Future Fund and the innovative new National Housing Supply and Affordability Council.
“All parties in the Senate also need to give fair consideration to passing the Australian government’s housing bills, which will boost social and key worker housing around the country,” Zorbas said.
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