The gap between housing demand and supply in Australia is increasing alarmingly, with new figures indicating a projected shortfall of 88,809 property approvals over the next three years. Bolst Property Group’s analysis of Australian Bureau of Statistics data highlights Collingwood, Victoria, as the suburb facing the most drastic building black spot in the nation, indicating a severe housing crisis.
Between 2022 and 2025, Collingwood is expected to gain 1,554 new residents, creating a demand for 818 additional dwellings to meet residential needs. However, from 2023 to 2025, only 40 housing approvals were granted in the area, resulting in a staggering shortfall of 778 homes — approximately 130 homes lacking for every 1,000 estimated dwellings.
Comparative Shortfalls Across States
Following Collingwood, Claremont in Western Australia is facing a substantial shortfall as well, with 1,294 expected new residents but only 16 building approvals from 2023 to 2025, translating to a gap of 572 homes. This projects to a shortfall of 115 homes per 1,000 estimated dwellings, with just 154 approvals anticipated for the 2025/26 fiscal year.
New South Wales’ Hurstville-Central area ranks third in the nation’s housing shortage, tallying 102 homes per 1,000 estimated, while the ACT’s Reid and the NT’s Mount Johns round out the top five, showing gaps of 102 and 98 approvals respectively. Interestingly, Tasmania appears to be in a different situation altogether, with no registered shortfalls; its population has only increased by about 4,000 people in three years, while around 8,000 new homes have been approved.
The Implications of the Housing Crisis
Tom Bolst, founder of Bolst Property Group, pointed out that rising housing demand coupled with inadequate supply means more intense competition for fewer suitable homes. “This often results in buyers stretching their budgets, settling for smaller properties, or relocating further from their workplaces and families. First-time buyers are especially vulnerable in this environment due to their limited financial flexibility,” he remarked. Although the study does not forecast specific price hikes, it emphasizes that pressure on housing supply will complicate access.
To tackle these issues, Bolst advocates for a reduction in bureaucratic obstacles and improved coordination of infrastructure to expedite housing delivery. He emphasizes, “In new developments, recognizing potential residential land is just the starting point. Necessary infrastructure—roads, water, sewage—along with relevant approvals must follow swiftly.”
Long-Term Projections and Industry Concerns
The Master Builders Association recently released a forecast indicating that Australia can expect fewer than 920,000 new home starts from now until the fiscal year 2030-31. This figure represents an 8.4% decrease from earlier predictions, highlighting a concerning trend in construction capacity. Denita Wawn, CEO of Master Builders Australia, criticized current policy directions: “Evidence underscores that our housing strategy is deteriorating, and we must recalibrate our approach,” she stated.
Wawn further noted that current regulations and budgeting strategies threaten the delivery of new homes, saying, “The implications of the federal budget decisions lead to diminished housing supply, pushing rents even higher.” The underlying issues involve not just labor shortages but also mounting investment challenges and insufficient productivity, which can push costs up to $320,000 per new residence.
Road Ahead and Recommendations
Industry experts agree on the necessity of adopting a pro-construction stance aimed at dismantling excessive regulations and enhancing the investment landscape. Michael Hickinbotham from Hickinbotham Group praised the South Australian government's commitment to boosting land supply but emphasized the need for expedited processes across the board: “We need urgent progression in getting land rezoned and housing approvals accelerated,” he stated.
Furthermore, Hickinbotham called for improvements in critical infrastructure investment, particularly in water and wastewater management to hasten new developments. He recommended expanding HomeStart’s shared equity scheme, suggesting that elevating its price limit would help make home ownership more accessible to those in need.
As the industry faces multiple challenges, timely reforms will be critical in bridging the significant housing gaps and ensuring that new homes can meet Australia’s incoming demand in the years ahead.