Australia’s population is growing faster than the country’s housing supply, which is contributing to low rental vacancy rates and fast-rising rents.
The population grew by a record 624,000 people in the year to June, according to the latest data from the Australian Bureau of Statistics (see graph). AMP deputy chief economist Diana Mousina said demand for housing is running well above supply.
“Housing demand is tracking at around 220,000 per year but dwelling completions (which are indicative of housing supply) will be around 175,000 in 2023,” she said.
“Current building approvals, which are a sign of future completions, are running close to an annualised figure of 160,000 which means the outlook for housing supply remains very challenging, despite the government targets to lift housing supply.
“This housing shortfall will continue to add pressure to the already tight rental market, which is clear in ultra-low vacancy rates and high rental growth.”
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