Yahoo Finance Why the housing crisis will keep getting worse
Australia faces a shortage of 106,300 homes in the coming years.
Australia’s rental and housing crisis is set to deepen, with the country facing a shortage of 106,300 homes over the next five years.
A new report by the National Housing Finance and Investment Corporation (NHFIC) found high interest rates, returning migration, increased construction costs and industry constraints were all adding to the shortfall.
More than 1.8 million new households are expected to form across Australia over the next 10 years, with just 148,500 new dwellings added this financial year, falling to 127,500 in 2024-2025. The biggest shortage will be among apartments and multi-density dwellings.
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“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 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.”
A strong demand for housing, coupled with tight supply of labour and materials, as well as bad weather, has put significant pressure on the construction industry. Approximately 28,000 dwellings were delayed in 2022.
It follows the collapse of Australian construction giant Porter Davis on Friday.
Rental crisis
NHFIC estimates 331,000 households are already in rental stress - which is defined as lower-income households who pay more than 30 per cent of their income in rent. A further 46,500 households are experiencing homelessness.
South-East Queensland experienced the largest rental rises, the report found, with all local government areas seeing rental increases of 30 per cent or more from early-2020 to January 2023.
In Sydney, rents in several outer areas rose more than 30 per cent since before the pandemic. More than half of Melbourne areas experienced rental increases of less than 10 per cent.
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