Australia faces years of extreme rental and housing pain as the nation confronts a shortage of 106,000 dwellings by 2027 due to high-interest rates, soaring immigration and community opposition to new homes.
While new figures show dwelling values climbed 0.6 per cent in March after almost a year of falls, a report by the National Housing Finance and Investment Corporation (NHFIC) forecasts Brisbane alone will be short 12,300 dwellings within five years while Sydney will be short more than 10,000.
The country is already facing extreme housing pressures with rental vacancy rates in every capital at or below 1 per cent, delays and growing costs hitting the dwelling construction sector, while bad weather through 2022 slowed building periods.
On Friday, building firm Porter Davis Homes collapsed, stopping work on 1700 projects in Victoria and Queensland. It also had 779 signed contracts with customers where construction was yet to start.
NHFIC, which is forecasting 1.8 million new households over the next decade, believes just 148,500 new dwellings will be added to the national housing stock this financial year, and that total will drop to 127,500 in 2024-25.
The corporation expects the biggest drop will be in apartments and multi-density dwellings. It expects a net 57,000 homes a year to be built over the next five years, 40 per cent down on levels experienced in the late 2010s.
Driving the increase in demand is high net migration, which this year is expected to reach 350,000 as overseas workers and students flood back in to the country.
But supply is falling, and the corporation found the availability of serviced land, high costs of construction, the faster-than-expected rise in interest rates, and “ongoing community opposition to new development” all contribute to the problem.
NHFIC chief executive Nathan Dal Bon said the combination of strong demand and low housing supply would weigh on the market for years with renters at particular risk.