To quantify Australia\u2019s housing shortage, Brooker uses two scenarios to estimate the extent of the housing deficit from June 2019 to the present:<\/p>\n
![\"Housing](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2023\/05\/housing-crisis-2.jpg\")
<\/p>\n
1. Ideal world scenario:<\/span><\/h2>\nThis scenario operates on highly optimistic assumptions:<\/p>\n
\n- None of the newly completed dwellings over the past five years were knockdown rebuilds or redevelopments, despite industry estimates suggesting that typically 10-15% of all new homes fall into this category.<\/li>\n
- There are no newly completed homes sitting vacant, even though the average vacancy rate for new builds generally ranges between 5% to 10%. <\/div><\/li>\n
- Short-term rental properties, holiday homes, and Airbnbs are excluded from consideration, assuming that every dwelling is available for long-term residential use.<\/li>\n
- Australia\u2019s housing market was in perfect equilibrium as of June 2019, meaning there were just enough homes for the population at that point.<\/li>\n<\/ul>\n
Under this ideal scenario, the housing deficit would have grown by 98,000 dwellings since mid-2019.<\/p>\n
2. A more realistic scenario:<\/span><\/h2>\nHere, Brooker takes a more grounded approach with practical assumptions:<\/p>\n
\n- Assumes that 10% of newly built homes are knockdown rebuilds, which means they replace existing stock rather than adding new supply.<\/li>\n
- Assumes that 5% of newly completed homes remain vacant, either due to market factors or investor decisions.<\/li>\n
- This accounts for the fact that a significant portion of the housing stock is used for non-residential purposes, like holiday rentals.<\/li>\n<\/ul>\n
In this more realistic scenario, the estimated shortfall balloons significantly, with Australia now facing a deficit of 232,000 homes over the past five years.<\/p>\n
![\"Australia](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2024\/11\/Australia-housing-supply-vs-deficit.jpg\")
<\/p>\n
Brooker\u2019s findings align with other economists\u2019 estimates of our housing shortage.<\/p>\n
In other words, we need to build more than 200,000 new dwellings to bring the supply and demand ratio to a near-equilibrium state before providing accommodation for the more than 300,000 new people that we\u2019re adding to our population each year.<\/p>\n
Final thoughts<\/span><\/h2>\nThe numbers don\u2019t lie \u2013 Australia is on a collision course with a severe housing shortage, driven by policy misalignments and market pressures.<\/p>\n
The question remains: will the government act in time to avert this crisis, or will the housing shortage become an even bigger burden for Australians in the years to come?<\/p>\n- Also read:<\/span>Everything you need to know about the state of Australia\u2019s property markets in 20 charts \u2013 May 2025<\/span><\/a>
![\"slider](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2025\/05\/Property-markets-around-Australia-375x275.png\")
<\/li>- Also read:<\/span>Latest property price forecasts for 2025 revealed. What\u2019s ahead in our housing markets in the next year or two?<\/span><\/a>
![\"slider](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2018\/02\/problem-prediction-375x275.jpg\")
<\/li>- Also read:<\/span>Perth housing market update [video] | May 2025<\/span><\/a>
![\"slider](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2023\/03\/Perth-city-375x275.jpeg\")
<\/li>- Also read:<\/span>Where should I buy my next investment property in Australia?<\/span><\/a>
![\"slider](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/09\/property-investment-375x275.jpg\")
<\/li>- Also read:<\/span>Brisbane Property Market Forecast [2025] \u2013 What\u2019s Ahead & Where to Invest<\/span><\/a>
![\"slider](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/03\/brisbane-375x275.jpg\")
<\/li><\/ul><\/div>
Under this ideal scenario, the housing deficit would have grown by 98,000 dwellings since mid-2019.<\/p>\n
2. A more realistic scenario:<\/span><\/h2>\nHere, Brooker takes a more grounded approach with practical assumptions:<\/p>\n
\n- Assumes that 10% of newly built homes are knockdown rebuilds, which means they replace existing stock rather than adding new supply.<\/li>\n
- Assumes that 5% of newly completed homes remain vacant, either due to market factors or investor decisions.<\/li>\n
- This accounts for the fact that a significant portion of the housing stock is used for non-residential purposes, like holiday rentals.<\/li>\n<\/ul>\n
In this more realistic scenario, the estimated shortfall balloons significantly, with Australia now facing a deficit of 232,000 homes over the past five years.<\/p>\n
<\/p>\n
Brooker\u2019s findings align with other economists\u2019 estimates of our housing shortage.<\/p>\n
In other words, we need to build more than 200,000 new dwellings to bring the supply and demand ratio to a near-equilibrium state before providing accommodation for the more than 300,000 new people that we\u2019re adding to our population each year.<\/p>\n
Final thoughts<\/span><\/h2>\nThe numbers don\u2019t lie \u2013 Australia is on a collision course with a severe housing shortage, driven by policy misalignments and market pressures.<\/p>\n
The question remains: will the government act in time to avert this crisis, or will the housing shortage become an even bigger burden for Australians in the years to come?<\/p>\n- Also read:<\/span>Everything you need to know about the state of Australia\u2019s property markets in 20 charts \u2013 May 2025<\/span><\/a><\/li>
- Also read:<\/span>Latest property price forecasts for 2025 revealed. What\u2019s ahead in our housing markets in the next year or two?<\/span><\/a><\/li>
- Also read:<\/span>Perth housing market update [video] | May 2025<\/span><\/a><\/li>
- Also read:<\/span>Where should I buy my next investment property in Australia?<\/span><\/a><\/li>
- Also read:<\/span>Brisbane Property Market Forecast [2025] \u2013 What\u2019s Ahead & Where to Invest<\/span><\/a><\/li><\/ul><\/div>
In this more realistic scenario, the estimated shortfall balloons significantly, with Australia now facing a deficit of 232,000 homes over the past five years.<\/p>\n
<\/p>\n
Brooker\u2019s findings align with other economists\u2019 estimates of our housing shortage.<\/p>\n
In other words, we need to build more than 200,000 new dwellings to bring the supply and demand ratio to a near-equilibrium state before providing accommodation for the more than 300,000 new people that we\u2019re adding to our population each year.<\/p>\n
Final thoughts<\/span><\/h2>\nThe numbers don\u2019t lie \u2013 Australia is on a collision course with a severe housing shortage, driven by policy misalignments and market pressures.<\/p>\n
The question remains: will the government act in time to avert this crisis, or will the housing shortage become an even bigger burden for Australians in the years to come?<\/p>\n- Also read:<\/span>Everything you need to know about the state of Australia\u2019s property markets in 20 charts \u2013 May 2025<\/span><\/a><\/li>
- Also read:<\/span>Latest property price forecasts for 2025 revealed. What\u2019s ahead in our housing markets in the next year or two?<\/span><\/a><\/li>
- Also read:<\/span>Perth housing market update [video] | May 2025<\/span><\/a><\/li>
- Also read:<\/span>Where should I buy my next investment property in Australia?<\/span><\/a><\/li>
- Also read:<\/span>Brisbane Property Market Forecast [2025] \u2013 What\u2019s Ahead & Where to Invest<\/span><\/a><\/li><\/ul><\/div>
- Also read:<\/span>Everything you need to know about the state of Australia\u2019s property markets in 20 charts \u2013 May 2025<\/span><\/a><\/li>
- Also read:<\/span>Latest property price forecasts for 2025 revealed. What\u2019s ahead in our housing markets in the next year or two?<\/span><\/a>
<\/li>- Also read:<\/span>Perth housing market update [video] | May 2025<\/span><\/a>
<\/li>- Also read:<\/span>Where should I buy my next investment property in Australia?<\/span><\/a>
<\/li>- Also read:<\/span>Brisbane Property Market Forecast [2025] \u2013 What\u2019s Ahead & Where to Invest<\/span><\/a>
<\/li><\/ul><\/div> - Also read:<\/span>Latest property price forecasts for 2025 revealed. What\u2019s ahead in our housing markets in the next year or two?<\/span><\/a>