4 ms·

Australia housing prices, rents surge as supply shortage deepens

12 points by mikhael 2y ago

robswc 2y ago
It is kinda crazy. I thought Northern Virginia prices were insane so I moved. I always heard that Canadian and Australian housing was "crazy" too but only recently learned that it is mind-blowing crazy. More housing will have to be built or people will have to move further from population centers. No way the average person is going to afford a $1MM house (not even large, or grand at that).
- randomdata 2y ago
  Or just wait. There is a lot of inventory out there now, and not much in the way of sales activity. Something has got to give and, as you point out, it isn't apt to be the buyers.
  - HappySweeney 2y ago
    I have no actual data on this, but my feeling is that many/most owners are so overleveraged that selling would be ruinous.
- viraptor 2y ago
  That is for the cities though. It's significantly lower for towns. They have their own infrastructure issues, but the option to move is still there. Seeing how hard it is to get some jobs/repairs done within a few days and based on job postings, it looks like there's work opportunity too.
  - Cordiali 2y ago
    Overall it'd be cheaper compared to Sydney and maybe one or two other cities, but more expensive than the rest. Plus the obvious, that living in the middle of nowhere can be quite isolating.
    - viraptor 2y ago
      "middle of nowhere" is really vague here. I'm not talking about a station in WA not accessible in the wet season. There's a good number of 30k+ towns around VIC/NSW where you can find lots of social contact.
Biologist123 2y ago
Man, if Australia can’t work this one out, there’s not much hope for the rest of us.
- nsonha 2y ago
  if you're referring to the fact that we are an entire continent, most of Australia's inland is uninhabitable desert. Having said housing problem comes from lack of developments more than anything.
  - randomdata 2y ago
    > comes from lack of developments Not really. People would be jumping all over building new housing to solve their housing woes if that were the problem. That isn't really happening because new houses cost even more! Realistically, the root issue is prolonged high employment coupled with our failure to bring much automation to home building. If people were desperate to accept any work that they can find, the cost of construction would be decimated, but so long as construction remains relatively unattractive work to a workforce full of choice it needs to pay a lot to convince anyone to do it; a cost that gets passed on to home buyers, and eventually renters by association.
    - taurath 2y ago
      So the problem is that people aren't being paid slave wages? Estimates are that labor is 35-40% of the cost, while materials are 50% of the cost. That seems a little high but not unreasonable > That isn't really happening because new houses cost even more! Could it also be a factor that wealth is extremely concentrated at the top, and the people at the top own a vast outsized share of the land. 25% of the properties in Australia is held by the top 1%. People who own a lot of property are getting fabulously wealthy when the median home price is $950,000AU, just not people who need to put a roof over their head.
      - randomdata 2y ago
        > So the problem is that people aren't being paid slave wages? As before, the problem is that people in need of housing can't afford them. If they could afford them, they'd just build a house already and the whole housing problem would be solved. But when new houses cost even more than the used houses they already can't afford...
Andaith 2y ago
So many problems here, it's tough to know where to start. Lets ignore the tax incentives investment properties and everything else and focus on purely supply + demand: - Immigration at 659,000 people[0] - Natural Births at 315,705[1] - Housing + Unit construction at 180,000[2] Assuming number of births is roughly consistent with number of people wanting to move out(I suppose there's about a 20 year gap, so lets say 250k, thats how many babies born in 2004), then there's roughly 909,000 additional people each year requiring housing, and 180,000 units of housing being constructed each year. Then you have to wonder how long this deficit has carried on for, and just how much longer it can go on. Something has to give eventually. I just hope we don't end up voting for nutjobs who capitalize on the fact the two main parties seem to not care about this at all because they all personally benefit from this situation. [0] https://www.theguardian.com/australia-news/2024/mar/21/migration-numbers-australia-2023-rise https://www.theguardian.com/australia-news/2024/mar/21/migra... [1] https://www.aihw.gov.au/reports/mothers-babies/australias-mothers-babies/contents/overview-and-demographics/state-and-territory https://www.aihw.gov.au/reports/mothers-babies/australias-mo... [2] https://hia.com.au/our-industry/newsroom/economic-research-and-forecasting/2024/01/australia-is-not-commencing-enough-housing-to-meet-1-2-million-target?srsltid=AfmBOoqNImjiBUYj3SNPz8Swiueaeu88KkAYhG3xvUAIEdRH8n6C7F_x https://hia.com.au/our-industry/newsroom/economic-research-a...
- exclipy 2y ago
  But how many people are dying and emigrating?
  - Andaith 2y ago
    Great Question! - There were 190,939 deaths in 2022, almost 20,000 more than 2021.[0] - Migrant departures decreased 2% to 219,000 from 223,000 departures a year ago.[1] So, about 400,000. I guess adding that all up, we have 509,000 net additional persons requiring housing, vs 180,000 additional housing units being produced. So, about 2.8 people per housing unit. So I guess the next question is, how many people live per housing unit, on average? ABS Knows: > In 2046 there are projected to be between 2.4 and 2.6 people per household on average[2] There's still a bit of a discrepancy there, but nowhere near as bad as I thought initially. I'd guess the only question left is "how many people would prefer to live in a less crowded house, if they were financially able"? [0] https://www.abs.gov.au/statistics/health/causes-death/causes-death-australia/2022 https://www.abs.gov.au/statistics/health/causes-death/causes... [1] https://www.abs.gov.au/statistics/people/population/overseas-migration/latest-release https://www.abs.gov.au/statistics/people/population/overseas... [2] https://www.abs.gov.au/statistics/people/population/household-and-family-projections-australia/latest-release#households https://www.abs.gov.au/statistics/people/population/househol...

12 points by mikhael 2y ago

It is kinda crazy. I thought Northern Virginia prices were insane so I moved. I always heard that Canadian and Australian housing was "crazy" too but only recently learned that it is mind-blowing crazy. More housing will have to be built or people will have to move further from population centers. No way the average person is going to afford a $1MM house (not even large, or grand at that).

randomdata 2y ago
Or just wait. There is a lot of inventory out there now, and not much in the way of sales activity. Something has got to give and, as you point out, it isn't apt to be the buyers.
- HappySweeney 2y ago
  I have no actual data on this, but my feeling is that many/most owners are so overleveraged that selling would be ruinous.
viraptor 2y ago
That is for the cities though. It's significantly lower for towns. They have their own infrastructure issues, but the option to move is still there. Seeing how hard it is to get some jobs/repairs done within a few days and based on job postings, it looks like there's work opportunity too.
- Cordiali 2y ago
  Overall it'd be cheaper compared to Sydney and maybe one or two other cities, but more expensive than the rest. Plus the obvious, that living in the middle of nowhere can be quite isolating.
  - viraptor 2y ago
    "middle of nowhere" is really vague here. I'm not talking about a station in WA not accessible in the wet season. There's a good number of 30k+ towns around VIC/NSW where you can find lots of social contact.

Biologist123 2y ago

Man, if Australia can’t work this one out, there’s not much hope for the rest of us.

nsonha 2y ago
if you're referring to the fact that we are an entire continent, most of Australia's inland is uninhabitable desert. Having said housing problem comes from lack of developments more than anything.
- randomdata 2y ago
  > comes from lack of developments Not really. People would be jumping all over building new housing to solve their housing woes if that were the problem. That isn't really happening because new houses cost even more! Realistically, the root issue is prolonged high employment coupled with our failure to bring much automation to home building. If people were desperate to accept any work that they can find, the cost of construction would be decimated, but so long as construction remains relatively unattractive work to a workforce full of choice it needs to pay a lot to convince anyone to do it; a cost that gets passed on to home buyers, and eventually renters by association.
  - taurath 2y ago
    So the problem is that people aren't being paid slave wages? Estimates are that labor is 35-40% of the cost, while materials are 50% of the cost. That seems a little high but not unreasonable > That isn't really happening because new houses cost even more! Could it also be a factor that wealth is extremely concentrated at the top, and the people at the top own a vast outsized share of the land. 25% of the properties in Australia is held by the top 1%. People who own a lot of property are getting fabulously wealthy when the median home price is $950,000AU, just not people who need to put a roof over their head.
    - randomdata 2y ago
      > So the problem is that people aren't being paid slave wages? As before, the problem is that people in need of housing can't afford them. If they could afford them, they'd just build a house already and the whole housing problem would be solved. But when new houses cost even more than the used houses they already can't afford...

Andaith 2y ago

So many problems here, it's tough to know where to start. Lets ignore the tax incentives investment properties and everything else and focus on purely supply + demand: - Immigration at 659,000 people[0] - Natural Births at 315,705[1] - Housing + Unit construction at 180,000[2] Assuming number of births is roughly consistent with number of people wanting to move out(I suppose there's about a 20 year gap, so lets say 250k, thats how many babies born in 2004), then there's roughly 909,000 additional people each year requiring housing, and 180,000 units of housing being constructed each year. Then you have to wonder how long this deficit has carried on for, and just how much longer it can go on. Something has to give eventually. I just hope we don't end up voting for nutjobs who capitalize on the fact the two main parties seem to not care about this at all because they all personally benefit from this situation. [0] https://www.theguardian.com/australia-news/2024/mar/21/migration-numbers-australia-2023-rise https://www.theguardian.com/australia-news/2024/mar/21/migra... [1] https://www.aihw.gov.au/reports/mothers-babies/australias-mothers-babies/contents/overview-and-demographics/state-and-territory https://www.aihw.gov.au/reports/mothers-babies/australias-mo... [2] https://hia.com.au/our-industry/newsroom/economic-research-and-forecasting/2024/01/australia-is-not-commencing-enough-housing-to-meet-1-2-million-target?srsltid=AfmBOoqNImjiBUYj3SNPz8Swiueaeu88KkAYhG3xvUAIEdRH8n6C7F_x https://hia.com.au/our-industry/newsroom/economic-research-a...

exclipy 2y ago
But how many people are dying and emigrating?
- Andaith 2y ago
  Great Question! - There were 190,939 deaths in 2022, almost 20,000 more than 2021.[0] - Migrant departures decreased 2% to 219,000 from 223,000 departures a year ago.[1] So, about 400,000. I guess adding that all up, we have 509,000 net additional persons requiring housing, vs 180,000 additional housing units being produced. So, about 2.8 people per housing unit. So I guess the next question is, how many people live per housing unit, on average? ABS Knows: > In 2046 there are projected to be between 2.4 and 2.6 people per household on average[2] There's still a bit of a discrepancy there, but nowhere near as bad as I thought initially. I'd guess the only question left is "how many people would prefer to live in a less crowded house, if they were financially able"? [0] https://www.abs.gov.au/statistics/health/causes-death/causes-death-australia/2022 https://www.abs.gov.au/statistics/health/causes-death/causes... [1] https://www.abs.gov.au/statistics/people/population/overseas-migration/latest-release https://www.abs.gov.au/statistics/people/population/overseas... [2] https://www.abs.gov.au/statistics/people/population/household-and-family-projections-australia/latest-release#households https://www.abs.gov.au/statistics/people/population/househol...