Addressing the Housing Crisis: Supply and Demand

Weekly Real Estate Market Update with Leigh Martinuzzi MPG

The housing market continues to grapple with soaring prices and a scarcity of available properties, presenting significant challenges for prospective buyers and renters alike. Conversations with individuals underscore a growing urgency to secure suitable accommodation, as affordability slips further out of reach for many. ABS figures released recently reveal a staggering population growth of 635,500 people, with a notable 82% concentrated in our capital cities. While regional areas are enticing due to housing affordability, constraints such as infrastructure, size and limited opportunities hinder widespread migration. The focus needs to be on finding solutions to address the housing issue in our capital cities and surrounding urban areas.

Prompting immediate action from policymakers is imperative to tackle the escalating housing crisis. Without interventions to bolster supply, the affordability gap will only widen. Creating additional areas for high, medium, and low-density housing not only addresses housing needs but also stimulates job creation. While long-term strategies are essential, urgent steps must be taken to keep pace with population growth.

A good sign that supply is an issue is last week’s auction clearance rates which saw a positive uptick of 4.8%, indicating improved buyer confidence. Brisbane, Perth, and Adelaide are leading the way in property price growth. With the combined value of residential real estate in Australia reaching $10.3 trillion, the property market continues to show resilience. However, as buyers navigate affordability concerns, prices may fluctuate, albeit not aggressively. Finding a balance between affordability and fair value will be key as we navigate the ever-evolving property market landscape.

Three charts below to reinforce the above.