The Rising Report #5 – Housing Supply in Australia: Migration vs. New Homes Crisis

New Homes vs. New Migrants: Who Wins?

  Australia is not just short of homes. It is short of policy alignment. In 2023–24, net overseas migration reached 446,000, adding the equivalent of a new Canberra in one year. Yet national housing starts fell to just 163,836 over the same period, the lowest since 2012.   At this pace, the federal government’s target of 1.2 million new homes in five years will fall short by over 100,000 dwellings.    

Population vs. Housing Supply Snapshot (2023–24)

 

Metric	Value	Source
Net Overseas Migration	446,000 people	ABS
New Housing Starts	163,836 dwellings	HIA
Annual Target to Meet Accord	240,000 dwellings	National Housing Accord
Projected Shortfall by 2027	100,000+ dwellings	NHFIC

   

The Core Problem

  The core problem is institutional. Migration policy is set federally to meet macroeconomic objectives. But the housing burden falls on state and local governments, jurisdictions with neither the fiscal power nor planning velocity to respond adequately.   This misalignment has created a structural failure where demand is national but delivery is local, slow, and often politically constrained.    

The Outcome

  The outcome is evident across every major city. Vacancy rates have dropped below 2 percent, with rents rising nearly 50 percent since early 2020. First home buyers are being priced out faster than they can save.   Investor activity remains concentrated in existing suburbs, pushing values higher in areas where land release is limited or already exhausted.    

Rental Market Pressures

 

Metric	Capital City Average	Range Across Cities
Vacancy Rate (Apr 2025)	1.30%	0.7% to 1.7%
Rent Growth Since 2020	49.80%	CoreLogic and Domain data
Proportion of Income to Rent	32% (median renter)	ABS Household Spending

   

The Supply Chain Strain

  Construction costs have surged 15 per cent since 2020, while builders grapple with labour shortages, planning bottlenecks and a spate of insolvencies.   Although Victoria and Queensland are pushing through planning reforms, meaningful completions are unlikely before 2030, allowing the national undersupply to deepen and giving switched on investors a powerful opportunity.    

What’s Needed

  Homes aren’t being built quickly enough, and no single state or council can fix it on their own. Migration inflows are out of sync with housing starts and completions. What’s needed is a national framework that ties migration targets to verified housing completions, with Canberra using its funding muscle to reward fast-tracked approvals and penalise under-delivery.   We already coordinate water, transport and energy at the federal level; housing now demands the same approach.    

The Bottom Line

  We believe these pieces are unlikely to lock into place before 2030. Until then, the gap between housing demand and supply will keep upward pressure on rents and prices, meaning investors who act before the policy gears mesh could enjoy several years of sustainable growth.    

Next Step: Speak With a Strategic Property Advisor

  At Rising Returns we specialise in helping investors navigate market cycles with precision.   Whether you are planning your next portfolio move, assessing property purchases, or reviewing your buyer's agency agreement, our team can help you make the right decisions in a fast shifting market.   📞 Call us now or book a strategy session online to take advantage of this new policy landscape before competition intensifies.  

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