{"id":188518,"date":"2025-04-27T17:30:14","date_gmt":"2025-04-27T07:30:14","guid":{"rendered":"https:\/\/propertyupdate.com.au\/?p=188518"},"modified":"2025-04-14T08:47:50","modified_gmt":"2025-04-13T22:47:50","slug":"australias-housing-crisis-is-about-to-get-worse-heres-what-you-need-to-know","status":"publish","type":"post","link":"https:\/\/propertyupdate.com.au\/australias-housing-crisis-is-about-to-get-worse-heres-what-you-need-to-know\/","title":{"rendered":"Australia\u2019s Housing Crisis Is About to Get Worse \u2013 Here\u2019s What You Need to Know"},"content":{"rendered":"

If you thought the housing shortage was bad now, just wait.<\/p>\n

According to the State of the Land Report 2025<\/em> released by the Urban Development Institute of Australia (UDIA)<\/a>, we\u2019re staring down the barrel of a staggering 400,000-home shortfall<\/strong> across Australia\u2019s capital cities by 2029.<\/p>\n

Let that sink in for a moment.<\/p>\n

Despite the Federal Government's ambitious target to build 1.2 million new homes<\/strong> over five years, the UDIA is predicting we\u2019ll fall nearly 393,000 dwellings short<\/strong>.<\/p>\n

And for property investors, this isn\u2019t just a headline, it\u2019s a signal of what\u2019s to come.<\/p>\n

The supply squeeze is real and getting worse<\/span><\/h2>\n

In 2024, we managed to complete just 135,640 new dwellings<\/strong> across our capital cities, a modest 2.4% bump on the previous year.<\/p>\n

That\u2019s hardly a recovery.<\/p>\n

While some areas did show signs of life\u2014Greater Perth posted a 22% rise in completions, and Melbourne edged up 7%\u2014those gains were offset by falling numbers in Sydney (down 4%), Adelaide (down 6%) and Canberra (down a concerning 16%).<\/p>\n

Looking ahead, it gets worse before it gets better.<\/p>\n

UDIA is forecasting an 11% drop in new home completions in 2025<\/strong>, down to just 120,660 homes.<\/p>\n

And by 2026, the number is expected to fall further to 116,700.<\/p>\n

It\u2019s only by the end of the decade that we see a modest uptick, with completions barely nudging back to around 125,000 homes by 2029, still well short of what\u2019s needed.<\/p>\n

And remember, this shortfall isn\u2019t just about numbers, it\u2019s about people.<\/p>\n

Fewer homes mean more pressure on renters, continued erosion of housing affordability, and a growing divide between those who own property and those who may never get the chance.<\/p>\n

What\u2019s going wrong?<\/span><\/h2>\n

There are a few key factors at play here and none of them are new:

<\/div><\/p>\n
    \n
  • \n

    Zoning and planning bottlenecks<\/strong> continue to stifle greenfield and infill development.<\/p>\n<\/li>\n

  • \n

    Construction industry capacity constraints<\/strong>, from labour shortages to material costs, are slowing progress.<\/p>\n<\/li>\n

  • \n

    And perhaps most significantly, bureaucratic inertia and short-term thinking<\/strong> from all levels of government are holding us back from making the big, bold changes we need.<\/p>\n<\/li>\n<\/ul>\n

    The report highlights that while greenfield lot sales did improve by 25% in 2024 across capital cities, this recovery is coming off a very low base.<\/p>\n

    Sales are still 52% below the 2021 peak<\/strong>, and Melbourne\u2014the nation\u2019s largest housing market\u2014is dragging the chain with \u201cextremely weak performance.\u201d<\/p>\n

    Lot prices, meanwhile, surged 13% nationally to a median of $421,525<\/strong>\u2014double the average annual price growth of the past decade.<\/p>\n

    That growth was driven by stronger markets like South East Queensland, Adelaide, and Perth, where both demand and delivery were more resilient.<\/p>\n

    Population growth vs. housing supply: a growing mismatch<\/span><\/h2>\n

    Australia\u2019s population grew by 552,000 people in FY24<\/strong>, roughly double the long-run average, driven largely by immigration.<\/p>\n

    And while that\u2019s a good sign for long-term economic growth, it\u2019s a serious concern for housing.<\/p>\n

    Because the housing supply hasn\u2019t even come close to keeping up.<\/p>\n

    UDIA points to the period between 2007 and 2014 as a critical time when underbuilding laid the groundwork for today\u2019s rental crisis.<\/p>\n

    This chronic undersupply has compounded over time, eroding affordability, driving up household debt, and pushing homeownership out of reach for many Australians.<\/p>\n

    What\u2019s the solution?<\/span><\/h2>\n

    Let\u2019s be clear: the solution is not to simply \u201cbuild more houses.\u201d<\/p>\n

    That\u2019s the destination, but we need a much more strategic approach to get there.<\/p>\n

    Here\u2019s what I believe needs to happen:<\/p>\n

      \n
    1. \n

      Unlock development-ready land<\/strong>
      Fast-tracking rezoning and removing planning bottlenecks is essential. But not just any land\u2014we need land in the right locations, close to infrastructure, jobs, and transport.<\/p>\n<\/li>\n

    2. \n

      Incentivise the delivery of medium-density housing<\/strong>
      We can\u2019t keep sprawling out forever. Townhouses, duplexes, and low-rise apartments offer a \u201cmissing middle\u201d solution that suits many modern households.<\/p>\n<\/li>\n

    3. \n

      Support the construction sector<\/strong>
      With the industry still struggling under rising costs and capacity issues, targeted support and regulatory streamlining can help developers bring projects to market faster.<\/p>\n<\/li>\n

    4. \n

      Promote long-term certainty in policy and planning<\/strong>
      Investors and developers need confidence to commit to large-scale projects. That means fewer reactive policy changes and more long-term vision and collaboration across government.<\/p>\n<\/li>\n

    5. \n

      Facilitate private sector involvement in affordable and social housing<\/strong>
      The government can\u2019t do it alone. Private sector partnerships, backed by the right incentives and frameworks, are key to scaling up the supply of non-market housing.<\/p>\n<\/li>\n<\/ol>\n

      Final thoughts<\/span><\/h2>\n

      We\u2019ve underdelivered for decades.<\/p>\n

      And unless we treat the housing supply like the national emergency it is, we\u2019re setting ourselves up for another decade of worsening affordability, increasing inequality, and declining homeownership.<\/p>\n

      The UDIA report is grim, but it\u2019s also a wake-up call.<\/p>\n

      If we act now, with urgency, coordination, and long-term thinking, we can start to close the gap.<\/p>\n

      But make no mistake: the clock is ticking, and the cost of inaction is only rising.<\/p>\n

      <\/div>\r\n
      <\/div><\/p>\n","protected":false},"excerpt":{"rendered":"

      If you thought the housing shortage was bad now, just wait. According to the State of the Land Report 2025 released by the Urban Development Institute of Australia (UDIA), we\u2019re staring down the barrel of a staggering 400,000-home shortfall across Australia\u2019s capital cities by 2029. Let that sink in for a moment. Despite the Federal…<\/p>\n","protected":false},"author":94,"featured_media":185268,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[54,1118],"tags":[],"class_list":["post-188518","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-property-updates","category-news-and-features"],"acf":[],"yoast_head":"\nAustralia\u2019s Housing Crisis Is About to Get Worse \u2013 Here\u2019s What You Need to Know<\/title>\n<meta name=\"description\" content=\"If you thought the housing shortage was bad now, just wait. 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