The Scorecard:
Are We Building Enough Houses Yet?
If the government were assessed on creating PR, they’d get an A+!
But sometimes you have to put the spin aside and ask … how are we really doing?
And the biggest topic surely is how are we doing against our housing target?
Remember that?
1.2 million homes in 5 years.
It was a staggering target when it was announced in August 2023.
And everyone breathed in sharply, stunned at how audacious and visionary it was.
Because it meant building an average of
240,000 homes a year.
And sure, it takes time to get rolling, I get that.
You expect to be a bit slow out of the gates and build up momentum.
But we haven’t even got out of the gates. We haven’t even turned up to the start line.
And we’re already 2 years in.
I won’t give you a narrative, but here’s how the numbers are currently stacking up:
- Just 177,000 homes were finished in 2024. That’s 25% less than the target which means we need to build even more each year to catch up.
- Only 168,050 builds commenced last year. It’s going the wrong way. And it’s the lowest number in a decade.
- The National Housing Supply and Affordability Council (NHSAC) estimate that only 938,000 new homes will be built in the 5 year period.
- Worse still, many of these new homes require an old home to be knocked down. About 12% of new houses see an old home knocked down. Taken into account, and it’s a net increase of just 825,000 homes over the 5 year period
- The shortfall is expected to be 375,000 homes – a shortfall of almost 30%
It Gets Worse
Here’s another unusual fact for you.
In 2016, the average household was 2.6 people. But at the last census in 2021 this dropped to 2.5 people per household.
This might not seem much or significant.
But think about it.
With 27 million people, that’s another 415,000 dwellings which were built just to house the exact same number of people. That’s 83,000 houses a year – before immigration is even factored in.
No wonder we got so far behind.
Add to this a net increase of 445,900 people in 2024. This takes into account migration here plus births.
And subtracts deaths and people who leave.
If they follow the same pattern of 2.5 people per household, it’s another 178,360 houses.
More Bad News
Then to make matters worse, it takes a whole lot longer to build a house.
Take a look at this chart from the HIA.
It shows that, for a long time it took around 9 months at most to build a house from approval.
But now?
Now it takes over 12 months.
And it’s no coincidence this happened when Covid hit. Materials suddenly took longer to get, and cost more.
To add fuel to the fire, because the price of materials has shot up since Covid it costs more to build a house.
This means less projects stack up financially, and less get built.
And ironically, the only thing which will see more houses built is if house prices go up so the numbers work.
Plus our immigration mix.
The top 10 occupations of new immigrants do not include any trade skills. This means we need to build more houses, and we don’t have the skilled people to do it.
Lots Of Numbers.
How About I Just Give You The Results?
Now, that’s a lot of numbers.
But it’s just like in school where you have to show your workings.
To be brief though, here’s an overview:
Total Houses Required In 2024: 261,360
Total Extra Houses Built In 2024 (Factoring In Houses Knocked Down): 155,760
Ouch!
Total Houses Needed Per Year To Catch Up: 261,060
The result? FAIL.
Here’s Where You Come In
OK, listen.
The reason I’m telling you all this is to prove that house prices are certain to keep going up.
When there’s a massive shortage of something and overwhelming demand for it, prices increase.
And we’re so helplessly behind, Australian housing is the safest investment.
If You Own Something People Want, The Price Of It Goes Up (Same Goes For The Rent)
It’s simple economics.
If lots of people need something, and there’s not enough of it then the price of it goes up.
And as you can see, lots of people need houses, and we aren’t building enough of them.
Not even close.
This is why investing in real estate is such a smart and safe move.
The worse the shortage gets, the higher the value of each house goes, and the same goes for the rent.
And in case you feel like this is somehow exploiting people for your own personal gain, it’s not.
Investors Like Us Play A Vital Role By Buying Houses.
Not only do our houses get lived in (unlike the many vacant houses out there), our involvement in the market means more houses get built.
We put money in, houses get built and the number of houses increases.
And we make a profit at the same time.
Here’s How It Works
You can get into the market and enjoy high capital growth and rental income surprisingly easily.
All you need is $150,000 household income and for your house to be worth $150,000 more than you owe on it, OR if you’ve owned your house for 3 years or more, then chances are you have this already.
If you have, you’re invited to spend some time on a Google Meet with one of our Senior Property Wealth Planners to show you how this works.
They’ll help determine your ability to replace your income by investing in property.
They’ll map out an overview of what you should do, and when.
Show you how many properties you could invest in right now if you choose to.
And of course answer any questions you have.
There’s no cost for this either.
We do it in the hopeful expectation that if you decide to invest, you’ll ask us how we can help you.
No obligation, no pressure.
First things first.
Enter your details below, and we’ll contact you to book in a time.