Housing shortage in Australia is deepening, with the latest research revealing that 25 metro and regional markets are critically undersupplied. This shortage, compounded by rising demand, continues to inflate property prices, making home ownership increasingly out of reach for many Australians.
The report, Australia’s Housing Supply Crunch: 25 Undersupplied Regions FY 24/25, from InvestorKit, highlights five key regions that stand out as the most affected by severe housing shortages. These areas are grappling with a rapidly growing population and a dramatic decline in available housing stock, exacerbating the affordability crisis.
Five regions hit hardest by Australia’s housing shortage
InvestorKit’s research identifies five cities in Australia facing the most severe housing shortages:
- Fremantle (Greater Perth): Population up 14%, for-sale listings down 29%, new house approvals down 77%.
- Bayswater-Bassendean (Greater Perth): Population up 7%, for-sale listings down 21%, new house approvals down 65%.
- Joondalup (Greater Perth): Population up 4%, for-sale listings down 31%, new house approvals down 62%.
- Mackay (Regional Queensland): Population up 7%, for-sale listings down 40%, new house approvals down 50%.
- Gladstone (Regional Queensland): Population up 8%, for-sale listings down 31%, new house approvals down 48%.
These five regions, marked by sharp population growth and severe housing stock shortages, are likely to experience significant price hikes in the near future. With vacancy rates in many regional areas still below 1%, the situation for renters remains dire.
Addressing the housing crisis: solutions and suggestions
Arjun Paliwal, CEO of InvestorKit, stresses that tackling the housing crisis requires more than just increasing construction. Several key solutions are needed to address the supply-demand imbalance:
- Planning system reforms: Streamline land supply and development approvals to boost housing stock.
- An investor-friendly environment: Reduce negative sentiment towards investors to stabilise the rental market.
- Fairer tax policies: Reduce disincentives for property transactions and improve market fluidity.
- Better population distribution: Encourage growth outside major capital cities with improved infrastructure and services.
- Support for alternative housing models: Expand build-to-rent developments and incentivise diverse housing providers.
As Australia’s housing crisis deepens, urgent action is needed to address the growing supply shortage and its impact on affordability. While some regions face immediate price surges, strategic reforms in planning, taxation, and infrastructure could pave the way for a more balanced and sustainable housing market.
