The latest Urban Development Institute of Australia (UDIA) Housing Index for the June quarter highlighted a growing crisis in the housing market, with demand skyrocketing while supply lags behind.
According to the report, the current supply levels for both homes for sale and rentals are at near-decade lows, contributing to higher prices and making homeownership increasingly difficult to achieve.
The UDIA supply sub-index, which tracks housing supply levels, reached a worrying low of 88 index points, indicating a “weak performance band.”
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Col Dutton (pictured above), UDIA national president, pointed out that housing supply has shown no significant recovery across any Australian jurisdiction. The report also notes that the March and June 2024 quarters recorded the lowest index levels in the history of the series.
The housing market’s future outlook is clouded by rising construction costs and a strained capacity in the residential sector.
The report predicts that these ongoing pressures will continue to suppress housing supply for the next two quarters, further limiting relief for renters and homebuyers.
This supply shortage, exacerbated by record low rental listings, is expected to keep prices elevated.
Despite the supply-side challenges, housing demand continues to surge, as shown in the UHI demand sub-index for June.
Dutton attributed the rise to increased owner-occupier mortgage lending and higher population growth rates.
“The UDIA Housing Index shows that extremely challenging housing market conditions underscore the need for governments across the nation to work with the residential development sector on solutions to unlock new dwelling supply faster,” Dutton said.
Among Australia’s states and territories, Western Australia stood out as the strongest performer in the housing market, with demand 54% above the national average.
Queensland and South Australia also performed above average, while smaller markets like Tasmania, the Australian Capital Territory, and the Northern Territory struggled due to weaker population growth and constrained supply, UDIA reported.
Prior to this report, UDIA reported that Australia is headed for a decade-low supply that will push prices higher and worsen the current affordability crisis. Dutton also stressed the importance of fast-tracking visas for overseas construction workers to mitigate skilled worker shortages.
Read the latest UDIA media release here. For the full UDIA Housing Index Report for the June Quarter, click this link.
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