Sydney, Jan 13: Australia’s worsening housing crisis is under the spotlight, with new research by InvestorKit revealing twenty-five key metro and regional markets facing severe housing shortages.
The whitepaper, Australia’s Housing Supply Crunch: 25 Undersupplied Regions FY 24/25, highlights an alarming supply-demand imbalance in three hundred and thirty regions across the country, underscoring the persistent challenges in both sales and rental markets.
According to Arjun Paliwal, CEO and Founder of InvestorKit, Australia’s leading property investment advisory firm, “Australia is experiencing a chronic supply crunch, causing property prices to skyrocket.
Our housing market is among the least affordable in the world due to growing demand, low established supply and a decline in national average household size, and we are still a long way from resolving the issue.”
InvestorKit, twice named Buyer’s Agency of the Year at the REB Awards, introduced its proprietary Supply Shortage Score (SSS) to assess housing supply levels. This year’s findings indicate that areas facing the worst shortages are likely to see continued strong price growth.
Among the most undersupplied regions, five areas stand out:
- Fremantle (Greater Perth) – Population growth of fourteen per cent over the past decade, coupled with a twenty-nine per cent decrease in for-sale listings and a seventy-seven per cent drop in new house building approvals over the past three years.
- Bayswater – Bassendean (Greater Perth) – A seven per cent population increase and a twenty-one per cent decline in available listings, while building approvals plunged by sixty-five per cent in the last three years.
- Joondalup (Greater Perth) – Demand rose by four per cent, while supply fell by thirty-one per cent, with building approvals down by sixty-two per cent.
- Mackay (Regional QLD) – A seven per cent rise in population alongside a forty per cent reduction in listings and a fifty per cent decline in building approvals.
- Gladstone (Regional QLD) – Population growth of eight per cent, a thirty-one per cent drop in listings, and a forty-eight per cent decline in new house approvals.
The report also highlights rental market pressures, with vacancy rates improving slightly in some capital cities but remaining critically low—below one per cent—in numerous regional markets.
Paliwal notes that simply increasing dwelling stock isn’t sufficient to fix the issue.
“If that approach were effective, Australia wouldn’t find itself in this situation despite a twenty per cent increase in total dwelling stock over the past decade. Instead, we see the number of for-sale listings is thirty per cent lower than it was ten years ago,” he explained.
InvestorKit’s whitepaper recommends a comprehensive, multi-pronged solution to tackle the crisis.
Proposed measures include better population distribution across regional areas, improved infrastructure services, streamlined planning systems, and a fairer tax structure to boost housing stock mobility.
Paliwal also advocates for greater support for diversified housing providers like Build-to-Rent and fostering a more investor-friendly environment.
“The housing supply shortage cannot be resolved by criticism of investors and the private sector. We need collaborative efforts and innovative policies to ensure long-term sustainability,” Paliwal added.
While long-term solutions will take years to materialize, InvestorKit predicts short-term price growth in undersupplied markets will continue as demand outstrips supply.
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