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Australia has built 62,000 fewer homes than needed to accommodate population growth in the 2024 financial year, exacerbating the ongoing housing supply crisis, according to PropTrack senior economist Anne Flaherty.
This marks an improvement from the previous financial year (FY23), which saw a shortfall of 110,000 homes relative to the country’s growing population.
However, this year-on-year improvement doesn’t stem from a dramatic increase in the rate at which new homes are being built – only 4,400 extra homes were completed – but from a slowdown in population growth, Flaherty said.
“Over the year ending June 2024, Australia’s population grew by 552,000 people, down from 638,400 over the previous 12-month period,” she said.
“Only 72 per cent of the homes needed to accommodate population growth were built in FY24. It was even lower in the previous year, with just 61 per cent of the number needed completed.
“This estimate assumes an average of 2.5 people per household, as per RBA estimates, and also takes into account demolition rates – the number of existing homes demolished for the creation of new homes (varies by state, averaging about 10 per cent nationally).”
The undersupply is especially severe in certain states. Western Australia continues to face the greatest housing shortfall, with population growth outpacing housing supply for each of the past six financial years.
In FY24, just 48 per cent of the new homes needed in Western Australia were built, a slight improvement from the 36 per cent constructed in FY23. With fewer than half of the required homes being built, it’s no surprise that Perth has seen the sharpest increase in property prices over the past year.
Following Western Australia, the Northern Territory and Queensland also struggled with housing supply, building only 56 per cent and 61 per cent of the homes needed for population growth in FY24, respectively. In contrast, the shortfall was 26 per cent in NSW, 18 per cent in Victoria, and 12 per cent in South Australia.
Tasmania and the ACT were the only regions where housing supply has kept up with population growth. In Tasmania, new home construction has far exceeded population growth, with more than four times the number of new homes needed completed.
“While the government is projecting population growth to moderate to pre-pandemic norms in the next 10 years, dwelling approvals remain subdued,” Flaherty said.
“Critically, approvals remain well below the level required to recoup the deficit in housing supply seen over the past three years.”
[RELATED: Victorian government announces ambitious housing target]
