Housing Market Shifts: Rising Costs, Fewer Builds, and Delayed Ownership
Weekly Real Estate Market Update with Leigh Martinuzzi – MPG
Australia’s property market remains in the spotlight this week, with notable developments in housing policy, construction activity, and shifting homeownership mindsets among younger generations. Here’s a breakdown of the most significant insights.
The latest CoreLogic report provides a comprehensive look into new housing policy proposals. The government’s recent focus on addressing housing affordability includes schemes to increase housing supply and support homeownership. Yet, while these proposals sound promising, execution remains a key challenge. Without tangible and accelerated action, the effects of these policies could take years to make a significant impact on housing accessibility for Australians. For many, affordability issues are already reshaping the market, and current policy timelines might not be fast enough to keep up with rising demand and prices.
Construction activity across the nation, meanwhile, has hit a rough patch. According to the October Cordell Construction Monthly report, new project commencements have declined. Rising construction costs, supply chain issues, and labour shortages are pushing builders to pause or reconsider projects, slowing the pace of new home supply. This lag in construction is compounding the housing shortage and keeping upward pressure on prices, especially in high-demand areas. Many industry experts suggest that without substantial incentives or support, the construction industry may continue to struggle to meet the nation’s housing needs.
Turning to the demand side, shifting attitudes towards homeownership are particularly noticeable among younger Australians. A recent article by Michael Yardney explores why Millennials and Gen Z are delaying buying a home. For many, skyrocketing property prices, high costs of living, and lifestyle choices are significant factors in this delay. Younger generations are now more inclined to prioritise financial stability and flexibility over homeownership. As renting becomes a longer-term reality for more Australians, the demand for affordable rental options is rising, placing further strain on an already tight rental market.
With these dynamics at play, Australia’s property market is set for an interesting path ahead. The gap between policy ambition and on-the-ground reality remains wide, and construction constraints coupled with shifting buyer mindsets are shaping a complex market landscape. For those looking to buy, sell, or simply keep an eye on market trends, understanding these factors can provide a clearer view of what’s next.
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