The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
Australia is grappling with an increasingly severe housing crisis as rising interest rates and skyrocketing construction costs stifle the supply of new homes.
Experts fear that the national goal of constructing 1.2 million new homes over the next five years will remain out of reach.
Issues such as high construction costs have accelerated the cost of building in major cities at a rate that outpaces property price growth. It increasingly appears more financially sound to purchase an existing home rather than build a new one.
According to Tim Lawless, CoreLogic's research director, "the cost of construction is yet to decline and it remains approximately 30% more expensive to build or renovate now compared to pre-COVID times," reflecting a prolonged period of inflating expenses.
SQM Research's founder and managing director, Louis Christopher, has expressed concern. He pointed out that "indicators show no signs of an imminent increase in housing supply," and has projected that there will be only "138,000 new dwellings completed by FY25."
PropTrack's executive manager for economic research, Cameron Kusher, noted, "Building approvals have plunged to their lowest in a decade. The pandemic-induced rise in construction costs, labour shortages, and 12-year high interest rates have severely impacted new constructions."
Adding to the discourse, Ben Burston, chief economist at Knight Frank, warned that "restoring high levels of housing construction will be a laborious task" due to the steep increments in both construction and financing costs.
The Australian Bureau of Statistics (ABS) revealed that only 163,800 homes were approved for construction in the year up to May. This is 32% (or 76,200 homes) short of the Albanese government’s 240,000 annual housing target.
It is crucial to note that the Albanese government’s target of 240,000 homes annually is unprecedented. The closest the nation came to meeting such a goal was in 2017 when 223,600 homes were built, which was still 7% below the target. This was achieved with a cash rate of 1.5%, compared to the current rate of 4.35%.
Back in 2017, builders also faced lower construction costs (some 40% less than today) and did not compete for labour with state government infrastructure projects. In comparison, data from the Australian Securities and Investments Commission (ASIC) show that nearly 3,000 construction firms went bankrupt in the 2023-2024 financial year, reducing the sector’s productive capacity.
Given these macroeconomic conditions, it seems highly improbable for the Albanese government’s housing targets to be met, and dwelling completion rates are likely to remain low in the near term.
Ultimately, a long-term resolution to Australia’s housing shortage may necessitate reducing net overseas migration, hence easing the population demand below the nation’s housing and infrastructure supply capacity.
If these structural issues aren't addressed, Australia's housing crisis is poised to exacerbate.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
Fresh personal loan comparisons across the Australian market are a useful reminder for motorcycle buyers: the cheapest-looking rate is not always the lowest-cost way to fund a new or used bike. Recent market updates continue to show meaningful differences between lenders, including advertised interest rates, comparison rates, upfront fees, ongoing charges and eligibility settings. - read more
The latest truck market update points to a familiar post-EOFY reset, with buying activity easing after the late-June rush. That does not necessarily signal weak demand. For many transport operators, tradies and delivery businesses, July is often a month for reassessing quotes, reviewing tax positions and deciding whether the urgency of end-of-financial-year purchasing still stacks up against day-to-day cash flow. - read more
Recent rural machinery coverage points to a used equipment market that is becoming more balanced after several years of tight supply, elevated values and strong competition for well-kept machines. For Australian farmers who delayed upgrades during the peak pricing period, that shift may create a more practical window to replace ageing tractors, headers, seeders, sprayers or support equipment without the same pressure to move immediately. - read more
Australians searching for quick finance are being urged to slow down before responding to online loan offers, as scam activity continues to target people under cost-of-living pressure. The warning is especially relevant for borrowers who need urgent money for bills, car repairs, medical costs, rent gaps or short-term business cash flow. - read more
Australia’s motorcycle market appears to be moving into a more selective phase after a stronger start to the year, with recent industry commentary pointing to uneven demand across different bike categories. For riders, that does not mean the market has stalled. It does mean buyers may need to be more strategic about timing, finance structure and the total cost of ownership. - read more
Financing a business truck can affect cash flow, tax deductions, GST credits and depreciation claims. This guide explains key Australian concepts to discuss with your accountant before choosing a truck finance structure. - read more
Small businesses that require regular transportation of goods may find it essential to purchase a truck. However, this acquisition can become a significant investment that requires careful consideration before making a decision. The two options available are buying or leasing a truck. In this article, we will explore the pros and cons of each option to help you make an informed choice. - read more
Trucks play a pivotal role in the Australian logistics and transport industry, serving as the lifeblood that keeps commerce flowing. The dependable rumble of engines crisscrossing the nation's highways is more than just a symbol of industry; it's a critical component of productivity and economic stability. Without these workhorses facilitating the timely movement of goods, the Australian market would face significant challenges meeting the demands of both businesses and consumers alike. - read more
Securing finance for any significant purchase can be a challenge, especially when it comes to acquiring a truck for business purposes. Coupled with a less-than-perfect credit score, this task can seem daunting for many Australians. The ripple effects of financial constraints can impede business operations, affecting the lifeline of commercial ventures that rely on transportation. - read more
Buying a used truck can be a practical way to expand or start a transport operation, but finance-related checks are essential before you commit. This guide explains PPSR searches, outstanding finance, private sale documents, lender valuation requirements, insurance and settlement steps for Australian buyers. - read more
Start Here
Get a free truck loan eligibility assessment and compare truck finance and leasing options
without accessing your credit file!!
Knowledgebase
Equity: The value of an ownership interest in an asset or company, after all debts and liabilities are deducted.
No comments yet. Be the first to share your thoughts.