Australia’s population currently sits at around 25.8 million. By the end of 2030, that number is expected to be closer to 29 million.
By land mass, we’re only about 27% smaller than the US, though their population sits at 331.9 million. With that in mind—sure, geographically, we’ve got enough room for an extra 3 million people. But do we have enough houses?
During the pandemic, Australia reported a net loss of 85,000 people, made up of both citizens who opted to flee the fortress and live overseas, and visa holders who returned to their home countries during uncertain times. But with borders reopened, Treasury expects overseas migration to exceed that of pre-pandemic levels (241,000 in 2019) due to our genuine skills shortage.
Essentially, Australia’s population growth came to a temporary halt due to closed borders. Now, as it claws its way back, our rising population is adding pressure to an already tight housing market.
In response to concerns, The Australian Government announced their $10 Billion dollar off-budget Housing Australia Future Fund to build social and affordable housing—which, though encouraging, will only see 30,000 homes built in the first five years. If estimates of a 10% population increase by 2029 prove true, where will the other 2,970,000 live?
Ask anyone in Sydney looking for a rental right now and they will relay nightmarish stories of packed viewings, countless denied applications, and extreme rental hikes. Rent prices have increased at the fastest quarterly rate ever recorded, up 4.3%. The national median rental price now sits at a record breaking $480 per week. In Sydney, median house rents have increased 14% YoY, currently at a median of $650, with units at $550.
As the country grapples with an undersupply of rental properties and the return of international students and short-term visa holders—both of which make up a large percentage of renters—competition is at an all-time high. Add continued rate hikes being passed onto renters and increased labour costs passed from building companies to investors, and rental prices look set to soar further. It has been 28 years since rates rose this aggressively when, in 1994, the RBA lifted rates by 2.75% in five months as opposed to seven months this year.
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With the country’s population set to climb, investors need more reason to enter the market after becoming discouraged by back-to-back-to-back (to-back…) interest rate hikes. If there were more certainty about future hikes and added expenses, now would be the perfect time for developers and investors to secure accommodation opportunities for a growing rental population. Until then, perhaps borrowing needs to become more accessible to investors to ensure more stock is being added to the property market.
In response to concerns, The Australian Government announced their $10 Billion dollar off-budget Housing Australia Future Fund to build social and affordable housing with 30,000 homes to be built in the first five years. The government is also partnering with the private sector with a goal of 1 million new homes to be built. If estimates of a 10% population increase by 2029 prove true, where will the other 2 million live?
