The latest house price trends
The main reason why Australia's housing prices have been uncontrollable is: tight supply!
The number of new home constructions has fallen to its lowest level in 40 years.
Experts call the housing shortage under construction a "social and economic disaster".
Australia's population has doubled since the 1980s, but the number of houses approved for construction in February announced by the Australian Bureau of Statistics (ABS) is significantly lower than the monthly average of the 80s.
ABS data shows that the number of building permits in February 2024 was 12,407 units, compared to the monthly average of 12,736 units in 1980, and the full-year figure has also declined.
Approvals for high-density housing fell 1.9 per cent to 163,100 units in the year to February, the lowest level in 11 years, according to industry body Master Builders Australia. High-density buildings include units, apartments, townhouses, and duplexes.
In 2023, nearly a million migrants arrived in Australia.
Institute of Public Affairs（IPA）研究员Kevin You博士表示，创纪录的移民人数加剧了住房短缺。
IPA analysis shows that the number of new immigrants abroad in the 2022-2023 fiscal year outnumbered the number of new homes built by about 380,000.
During the same period, Australia's net housing supply was 148,600 units, and net overseas migration soared to 528,392.
The IPA revealed that the average household size was 2.5 persons per home, and the housing demand generated by net overseas migration was 211,357 units, more than 62,000 units more than the new housing supply.
IPA's analysis of data from the Australian Bureau of Statistics and the National Housing Finance and Investment Corporation shows that 90% of Australia's SA4 areas have fewer new homes than new arrivals.
This disparity is most acute in Sydney, Melbourne, Brisbane, Perth and Adelaide, all of which are experiencing housing shortages due to the influx of migrants.
The urban areas with the greatest imbalance between housing supply and migration absorption include South East Melbourne, Sydney CBD, Inner South and South West Sydney.
According to the IPA, the net housing supply minus net overseas arrivals in these areas is about -20,000 units.
But by far the most unbalanced area between building supply and migration absorption is Melbourne's inner suburbs, where net construction minus net migration absorption is just over -32,000.
The worst imbalances in Queensland are in the Gold Coast and Brisbane Inner City, with imbalances of around -10,000 each.
Despite the government's intention to increase density to meet the surge in demand, policies and the pace of construction are far from solving the current problem, with high demand leading to rising housing prices and a tight rental supply.
ABS data shows that the rate of detached house construction rose in February, but this is not the government's goal, and high-density buildings are the fastest way to solve the housing crisis.
Due to the severe shortage of houses, many Australians have to compromise in order to live, or choose to buy a detached house in a remote area with cheap housing prices, and if they want to live in a nearby city, they can only choose an apartment.
Therefore, the current Australian housing market is more dominated by independent owners.
There is a clear upward trend in the number of properties sold by investors, mainly due to two reasons:
1. High borrowing costs mean fewer people buying investment properties;
2. Stricter leasing laws reduce investor demand.
This has led to a significant reduction in the number of rental properties in the Australian market.
According to the latest data from the National Australia Bank (NAB), property investment in Victoria fell last year, while advertising rents rose by 11 per cent.
NAB's March 2024 State Economic Survey showed that property investment fell 3.1% in the December quarter and 5.1% for the whole of 2023.
Shane Garrett, chief economist at the Australian Institute of Architects, said a 48 per cent increase in home construction was needed to keep up with the Albanese government's housing deal.
The latest approval data is once again a wake-up call for the Australian government that if there is no plan on how to house new immigrants, the record level of immigration will make Australia face a huge economic and social disaster!
Reference data: CoreLogic, REA