Housing Shortages Loom – Despite Building Boom


Building approvals for houses have surged over the past year fuelled by the Federal Government’s HomeBuilder initiative.

Approvals136,107 private sector approvals were reported by the ABS over the year ending April 2021 – an increase of 31.1% on the previous year.

Total residential new building approvals – inclusive of houses, units, and townhouses, were however higher by 15.0 % on the same year-on-year comparisons – reflecting continued weakness in the higher-density sector.

Despite sharp increases in home building over the past year – courtesy particularly of HomeBuilder, the number of new private-sector homes approved for building nationally over the past 3 years is still lower by 16.9% compared to the previous 3 year total – a decline of 115,260 dwellings.

Australia’s population, however, according to the ABS, has increased by 921,000 over the 3 years ending December 2020.

Fewer new homes with a rising population raise the specter of emerging housing shortages – leading to higher prices and rents, and growing social dislocation – and only offset recently by closed international borders which will likely be a temporary condition.

  • Sydney – the nation’s most populous city, has reported the sharpest decline in private sector new home building approvals over the past 3 years compared to the previous 3 years – down by 30.6% followed by…
  • Brisbane down 29.8%,
  • Melbourne down 18.1%, and
  • Perth lowers by 17.1%.

Adelaide approvals however are higher by 1.7%.

Aw Chart

Although demand initiatives directed at the housing market are proven winners for economic growth and employment during times of economic stress, longer-term sustainable supply-side policies are clearly required at all government levels to avoid what could emerge as a future accommodation crisis.


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Dr Andrew Wilson, Chief Economist of www.MyHousingMarket.com.au is widely regarded as Australia’s leading property economist.

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