MACRO ANALYSIS
Australia is in a structural housing crisis. Population is growing roughly 3× faster than homes are being built. In the three years to 2025, ~1.5 million people arrived but only ~527,000 homes were completed — creating a backlog of nearly one million dwellings. Net migration of 311,000/yr is running at 3× its historical average of 80,000. Meanwhile, the rate at which new homes are built has been falling every year since 2017, and the National Housing Accord's target of 1.2 million new homes by 2029 is already approximately one million homes behind schedule.
Read: Why this crisis doesn't have a single villain →
Population
27.72M
People living in Australia at Sep 2025
Growing at
+423,600/yr
↑ 1.6%
Annual Net Migration
311K
People arriving minus people leaving, yr to Sep 2025
Long-run avg
~80,000
3× avg
Total Homes in Australia
10.88M
Dwelling stock at June 2022 — latest ABS estimate
Growth rate
1.37%/yr
↓ falling
3-Year Homes Deficit
~1M
Homes needed but not built — 2023 to 2025
Accord target
1.2M by 2029
on track?
Temp Visa Holders
2.98M
People on temporary visas at Jan 2026 — a record
vs 10 years ago
+1 million
record
Australia's housing crisis in one chart — population growing faster than homes being built
Both lines show annual growth rates (%). When the red line is above cyan, demand is outpacing supply. The lines crossed in 2022 — and the gap has not closed since.
Population growth rate — how fast the number of people is growing (%/yr)
Dwelling stock growth rate — how fast the number of homes is growing (%/yr)
The crossover (2022): Before COVID, Australia built homes faster than people arrived. COVID temporarily collapsed migration. When borders reopened, migration surged to record levels — but the construction industry couldn't keep up. Population growth has exceeded housing growth every year since 2022.
People arriving vs homes being built — the raw numbers
Each year, how many people joined the population vs how many homes were completed. The gap between red and cyan bars is the annual deficit.
Population growth (people/yr)
Housing completions (homes/yr)
3-year total: 1.5 million people arrived. Only 527,000 homes were built. Australia needed roughly 3× more homes than it built.
Supply side — is home building speeding up or slowing down?
Quarterly net homes added to Australia's stock. Additions minus demolitions.
Total homes in Australia (Jun 2022)10.88M
Homes added this quarter+45,522
Homes demolished this quarter−6,987
Net new homes added+38,535
Annual growth rate (Jun 2022)1.37%
Annual growth rate in 20172.03%
Demand side — how many people is Australia absorbing?
Total population (Sep 2025)27.72M
People added last year+423,600
From migration (net arrivals)311,000
From births minus deaths112,600
Temp visa holders on Jan 20262.98M
Population growth rate vs Home building rate — the lines that define the crisis
Annual percentage growth of population (red) vs dwelling stock (cyan). When red is above cyan, more people are arriving than homes are being built. A shaded zone marks where the crossover occurred.
Population growing at this % per year
Home stock growing at this % per year
What types of homes are being built each quarter?
Houses (detached), townhouses (semi-detached), and apartments added to Australia's housing stock each quarter. A declining trend in all three types is visible since 2018.
Houses — standalone detached homes
Townhouses — semi-detached, medium density
Apartments — high density, multi-storey
Apartment construction has dropped sharply since 2016–2017 peaks. Houses remain the dominant form of new supply — but suburban land availability near cities is increasingly constrained.
Is the housing pipeline healthy? Homes added vs removed each quarter
Additions = newly completed homes. Removals = demolished or converted. Net growth = additions minus removals. The amber filled area is Australia's net new housing stock each quarter.
Homes added (completions)
Homes removed (demolitions)
Net gain (filled area)
How many homes does each state have?
Total dwelling stock by state and territory at June 2022. NSW and VIC together hold over half of Australia's homes.
How fast is each state's housing stock growing? (Jun 2022 quarter)
| State | Total Homes | Added this quarter | Net new homes | Growth rate |
|---|---|---|---|---|
| NSW | 3,373,885 | 12,168 | +9,712 | 0.3% |
| VIC | 2,839,329 | 14,340 | +12,049 | 0.4% |
| QLD | 2,181,124 | 9,373 | +8,420 | 0.4% |
| WA | 1,138,645 | 3,708 | +3,281 | 0.3% |
| SA | 808,359 | 3,549 | +2,833 | 0.4% |
| TAS | 259,421 | 788 | +740 | 0.3% |
| ACT | 190,935 | 1,485 | +1,405 | 0.7% ↑ highest |
| NT | 87,651 | 111 | +95 | 0.1% ↓ lowest |
| Australia | 10,879,349 | 45,522 | +38,535 | 0.4% |
ABS BUILDING ACTIVITY 8752 — VALUE OF RESIDENTIAL WORK, 2005–2025
The value of residential building work measures the dollar volume of actual construction activity — both what is newly entering the pipeline (commenced) and what is being physically delivered (done). Commencements lead work done by 12–18 months, making them a leading indicator of future housing supply. Chain volume measures (constant prices) are used to strip out inflation and show true volume changes. Source: ABS Building Activity, Australia (cat. 8752), seasonally adjusted.
How much residential construction is actually happening nationally? — work commenced vs work done ($M, constant prices, SA)
Value of new residential building work commenced (amber — entering pipeline) vs work done (cyan — physically completed) each quarter. Seasonally adjusted chain volume measures (2023–24 prices). When commenced exceeds done, the construction pipeline is growing. The gap between the two is the backlog of work in progress. Source: ABS Building Activity Table 03 & 07, Sep 2005 to Dec 2025.
Value of work commenced — new residential (SA, $M constant prices)
Value of work done — new residential (SA, $M constant prices)
National residential work done peaked at $24.5B in Jun 2018 (apartment construction boom), then fell as the cycle turned and rates eventually rose. The COVID stimulus drove commencements to a record $29.7B in Jun 2021 — but capacity constraints meant work done lagged badly. By Dec 2025 commencements ($26.9B) again significantly exceed work done ($23.2B), signalling a growing pipeline — but approval-to-completion lags of 18+ months mean new supply remains constrained in the near term.
Western Australia — value of house construction: work commenced vs work done ($M, constant prices)
WA-specific building activity for houses (new, private sector). Work done = seasonally adjusted. Work commenced = original series (SA not available at state level per ABS methodology). Shows the full mining boom cycle — peak, collapse, and partial recovery. Source: ABS Building Activity Tables 04 & 08.
WA work commenced — houses, original series ($M)
WA work done — houses, seasonally adjusted ($M)
WA house construction peaked at $2.7B work done in Mar 2015 (mining boom era), then collapsed to $1.25B in Jun 2020 — a 54% fall in real terms. Despite Perth property prices now exceeding $1M mean, WA house construction activity at Dec 2025 ($1.73B) remains 36% below its 2015 peak. The construction industry capacity destroyed during the 2015–2020 downturn has not been rebuilt fast enough to meet the surge in demand.
What this data tells us about the supply crisis
Commencements lead work done by 12–18 months. Strong commencements today signal more completions ahead — but capacity constraints can stretch that lag further in tight labour markets.
WA construction capacity was gutted between 2015–2020. A 54% fall in work done over 5 years meant apprentices left, subcontractors closed, and experienced trades moved to mining or other states. Rebuilding that capacity takes years — not months.
National commencements ($26.9B) now exceed work done ($23.2B) by a significant margin — the pipeline is growing, but construction cost inflation and labour shortages mean not all commenced projects will complete on schedule or on budget.
Chain volume measures (constant prices) strip out construction cost inflation. The real volume of construction activity is lower than current-price figures suggest — cost inflation has significantly inflated nominal values without a proportional increase in actual homes built.
How does residential construction compare across states? — value of house building work done by state, 2005–2025 ($M, SA, constant prices)
Value of new house building work done per quarter, seasonally adjusted chain volume measures, for the five main states. Each state tells a different story: VIC leads nationally, NSW peaked in the apartment era, QLD boomed pre-GFC, WA rode and crashed with mining, SA has quietly grown. Source: ABS Building Activity Table 04 (8752).
Victoria — national leader in residential construction volume
New South Wales — second largest, peaked 2018
Queensland — peaked pre-GFC 2007–08, recovering
Western Australia — mining boom cycle most visible here
South Australia — steady growth, now at record levels
Victoria has consistently built more houses than any other state — peaking at $4.7B/quarter in Sep 2021. WA's collapse from $2.7B (2015) to $1.25B (2020) is the sharpest fall of any major state — more than halving in real terms over 5 years. SA is the quiet outlier — growing steadily to record levels while other states cycle. QLD's recovery to $2.8B is notable given its population growth rate.
CONSTRUCTION WORKFORCE — ABS, NCVER, BUILDSKILLS, HIA — MAY 2026
Australia's housing supply crisis is no longer constrained purely by approvals, finance, or land. It is increasingly constrained by workforce capacity. Construction vacancies surged 19.3% in the February 2026 quarter — the highest growth of any major industry — while BuildSkills Australia warns the sector needs 22% more workers by 2028 just to meet existing housing targets. Apprenticeship commencements are recovering after federal incentives, but completions lag by 3–4 years. The practical result: build times have blown out by 34% for detached housing and up to 33 months for apartments — not because homes aren't approved, but because there aren't enough people to build them.
Construction Job Vacancies — Feb 2026
21,600
Highest quarterly growth of any major industry — +19.3% in Feb 2026 quarter
Source
ABS Job Vacancies
+19.3% qtr
Detached Build Time — Current
11.5 mths
Up from 8.6 months pre-COVID — a 34% blowout driven by labour shortages
Pre-COVID baseline
8.6 mths
+34%
Apartment Build Time — Current
~33 mths
Approaching 33 months in some markets. Supply delay compounding affordability pressure
Source
HIA / MBA
critical lag
Construction Apprentice Commencements — YoY
+36.5%
Sep 2025 quarter. Bricklayers and carpenters strongest. Federal incentives driving surge
Source
NCVER Sep 2025
recovering
Additional Workers Needed by 2028
~22%
BuildSkills Australia: sector requires 22% workforce expansion to meet Housing Accord targets
Source
BuildSkills Australia
structural gap
How tight is the construction labour market? — job vacancies in construction, quarterly 2021–2026
Number of unfilled construction job vacancies each quarter. The COVID stimulus surge drove vacancies to a peak above 30,000 in early 2022 as demand far outpaced available labour. Vacancies eased as the rate cycle hit builder confidence, but are now rising sharply again — signalling a second wave of labour shortages as commencements recover. Source: ABS Job Vacancies Australia (cat. 6354), quarterly. Feb 2026 = 21,600, +19.3% quarter-on-quarter.
The Feb 2026 surge (+19.3%) is the fastest quarterly rise of any major industry. Construction vacancies bottomed around 15,000–16,000 in late 2023–early 2024 as high rates suppressed building activity. The sharp rebound signals that demand for construction labour is outpacing the workforce recovery — exactly the dynamic that extended build times during 2022–23.
Is the workforce pipeline recovering? — construction trade apprenticeship commencements, annual
New construction trade apprentice commencements each year. Fell sharply from 2016–2020 as the housing downturn reduced employer demand. Government incentives from 2021 drove a recovery. Sep 2025 quarter shows +36.5% annual growth — but completions lag 3–4 years, meaning today's commencements don't translate to available workers until 2028–29. Source: NCVER Apprentices and Trainees, Sep 2025 quarter.
Construction trade commencements (annual)
The 2016–2020 commencement trough created a missing generation of tradespeople. Workers who would have qualified in 2019–2023 largely don't exist. The current surge in commencements (2021–2025) won't produce qualified tradies until 2025–2028 — after the Housing Accord's critical delivery window.
How much longer does it take to build a home now? — average build times, pre-COVID vs current
Average time from approval to completion for residential dwellings. Labour shortages, supply chain disruptions, and subcontractor capacity constraints have extended timelines materially. Longer build times reduce effective supply capacity — the same workforce delivers fewer homes per year. Source: HIA / MBA industry data.
Pre-COVID baseline (2018–19 avg)
Current (2024–25)
A 34% blowout in detached build times means the same workforce is delivering roughly 25% fewer homes per year compared to pre-COVID. Even if construction employment holds steady, effective housing output is materially reduced — a hidden form of supply constraint that doesn't show up in commencement or approval statistics.
The supply equation — housing delivery depends on all five factors simultaneously
Australia has historically focused on approvals and finance as the primary housing levers. The 2022–2026 cycle has exposed workforce capacity and builder solvency as equally critical constraints.
Dwelling approvalspartial recovery
× Labour availabilityconstrained
× Finance viabilityrate-suppressed
× Material supplynormalising
× Builder solvencyelevated risk
= Actual homes deliveredbelow target
Every factor must perform simultaneously. Fixing approvals alone does not fix supply. Australia currently has constraints in at least three of the five factors — labour, finance viability, and builder solvency — which is why completions continue to lag commencements by such a wide margin.
Workforce data snapshot — key metrics as at May 2026
Labour demand
Total national job vacancies337,900
Construction vacancies21,600
Construction vacancy growth (Feb 2026 qtr)+19.3%
Construction share of national vacancies6.4%
Apprenticeship pipeline (NCVER Sep 2025)
Total apprentices/trainees nationally297,925
Trade contracts change YoY (all trades)−6.7%
Construction commencements YoY+36.5%
Trade completions YoY+12.8%
Construction completions YoY+18.7%
Workforce outlook (BuildSkills Australia)
Additional workers needed by 2028~22% more
Primary constraint identifiedlabour capacity
Key levers identifiedmigration · apprentices
Data sources
ABS Job Vacancies Australia (cat. 6354) — CC BY 4.0
ABS Labour Force, Australia (cat. 6202) — CC BY 4.0
NCVER Apprentices and Trainees Sep 2025 — public release
BuildSkills Australia Workforce Capacity Study — public release
HIA / MBA Industry Data — public commentary
Department of Home Affairs — skilled migration data
Build time data sourced from HIA public releases. Job vacancy trend data is approximate for pre-2024 quarters — Feb 2026 figure of 21,600 (+19.3%) is confirmed ABS data. Apprenticeship trend is approximate annual; Sep 2025 quarterly YoY figures are confirmed NCVER data.
What is urban land in Australia zoned for?
Planning zones determine what can be built on land. "Zoned residential" means the land is approved for homes. "Transition/Masterplan" means it's earmarked for future development. Data covers all major cities, 2022.
80.6%
for housing
Residential (80.6%)Approved for homes — houses, townhouses, apartments
Transition (5.3%)Earmarked for future development — pending rezoning
Primary Prod. (3.8%)Farming or agricultural land
Mixed Use (1.9%)Homes plus shops/offices in same building
How big are Australia's urban land blocks?
This shows what size most residential blocks of land are across Australian cities. Useful for understanding density — smaller blocks mean more homes can fit per suburb.
<200m²Apartment footprint, courtyard home
400–600m²Small suburban block — standard in newer estates
600–800m²Most common — classic Australian suburban yard
1000m²+Quarter-acre block or larger
The most common block size is 600–800m² (30.2% of all blocks) — your classic Australian suburban backyard. Only 3.1% of blocks are under 200m² — meaning high-density urban infill is still relatively rare.
Where are new homes being approved? — by capital city (2021)
Total new dwelling approvals in each city during 2021. Approvals = homes with council permission to build (they haven't necessarily been built yet). Melbourne approved nearly twice as many as Sydney despite similar population sizes.
Melbourne vs Sydney: Melbourne approved 32,597 homes vs Sydney's 19,056 — a 71% difference. Yet Sydney has higher rents and greater housing stress. Planning approvals in Sydney are the bottleneck.
What type of land are new homes being built on? — by city
Percentage of new home approvals falling on each zone type. Perth has the highest share of "Transition" land — meaning much of its growth is on newly released greenfield sites at the urban fringe.
Residential (already zoned)
Transition/Masterplan (greenfield)
Mixed Use
Other
Perth stands out: 41.7% of approvals are on transition/greenfield land — the highest of any city. This signals rapid outward expansion rather than urban densification.
Block size distribution by city — are some cities denser than others?
Same block size data as above, but broken down per city. Cities with more small blocks (dark blue and blue) are denser. Cities with more large blocks (amber, red) are more sprawling.
Under 200m² — high density
200–400m²
400–600m²
600–800m² — most common nationally
800–1,000m²
Over 1,000m²
People Added Last Year
423,600
Total population increase, yr to Sep 2025
Growth rate1.6% annuallyhigh
Net Overseas Migration
311,000
Arrivals minus departures, yr to Sep 2025 — 73% of all growth
Historical avg~80,000/yr3× avg
Natural Population Increase
112,600
Births minus deaths — 27% of population growth
Share of growth27%stable
Temporary Visa Holders
2.98M
People on temporary visas at Jan 2026 — all competing for housing
10 years ago~2M fewerrecord
The housing crisis in one chart — when did population growth overtake home building?
Annual percentage growth of population vs homes in Australia. When the red line sits above cyan, the country needs more homes than it's building. The two lines crossed in 2022 and the gap has widened.
Population growth rate (%/yr)
Dwelling stock growth rate (%/yr)
Before 2022: Australia was building homes faster than population grew. After 2022: mass migration resumed post-COVID while construction costs rose 35%, build times increased 34%, and labour shortages constrained output. The gap between the lines is the crisis.
Where does population growth come from? Migration vs births
Net overseas migration (red) accounts for 73% of Australia's annual growth. Natural increase — more births than deaths — accounts for just 27%.
423K
people/year
Migration — 311,000 (73%)
Natural increase — 112,600 (27%)
How does current migration compare to Australia's historical levels?
Net overseas migration (NOM) in various years. The long-run historical average is ~80,000/yr. Australia has been running at 3–4× that level since borders reopened post-COVID.
NOM peaked at ~450,000 in 2023 — the highest in Australian history. Even at the current "reduced" rate of 311,000, migration is running nearly 4× the long-run average.
PERMANENT RESIDENCY PIPELINE — DEPT. OF HOME AFFAIRS MIGRATION PROGRAM REPORT 2024–25
Australia's rental crisis has a dimension that rarely appears in housing data: 3 million people on temporary visas cannot easily access mortgage finance, meaning they remain renters indefinitely. The permanent residency program is capped at 185,000 places per year — a ceiling set by government policy, not processing capacity. With ~3 million temp visa holders in the country, only ~6% can transition to permanent status annually. Processing time blowouts mean even those who qualify wait years in temporary limbo — as renters — before their status resolves. This is a structural driver of rental demand that is invisible in standard housing supply data. Source: Dept. of Home Affairs Migration Program Report 2024–25; Administration of Immigration and Citizenship Programs paper.
PR Program Cap — 2024–25
185,001
Places delivered under the Migration Program — down 2.6% from 190,000 in 2023–24
Source
Home Affairs 2024–25
policy-capped
Temp Visa Holders vs PR Grants
~6%
Annual transition ceiling: 185,000 PR grants against ~3M temp visa holders. Most remain as renters
Temp holders (Jan 2026)
2.98M
structural bottleneck
Already in Australia — PR Grants
54.6%
Of 2024–25 PR grants went to people already in Australia on temp visas — onshore transitions
Onshore PR grants
~101,000
temp-to-perm
Partner Visa Processing — 2024–25
11 months
Median Partner Visa (820) processing — up from 6 months in 2023–24. Permanent stage (801) 2+ yrs
Prior year median
6 months
+83% blowout
How many permanent places are granted each year — and how has the program shifted? Migration Program outcomes by stream, 2015–2025
Annual permanent Migration Program outcomes broken down into Skill stream (employer-sponsored, points-tested, regional) and Family stream (partners, parents, children). The program cap is set by government annually — it is not demand-driven. COVID devastated 2020–21 (113,000), with a post-pandemic catch-up in 2022–23 (195,000). Source: Dept. of Home Affairs Migration Program Reports.
Skill stream — employer-sponsored, points-tested, regional
Family stream — partners, parents, children
How long does it actually take? — indicative processing times by visa type, 2024–25
Median processing times for key temporary and permanent visa subclasses as reported in the Dept. of Home Affairs Administration paper (Q1 2024–25). Processing times have increased across most demand-driven categories. People waiting on temporary visas are renters — they cannot generally access mortgage finance until permanent status is granted. Source: Admin of Immigration and Citizenship Programs paper.
Processing time (months) — median
The rental pressure connection — why processing delays matter for housing
Temp visa holders cannot access mortgage finance in most cases. Australian lenders typically require permanent residency or citizenship for standard home loan products. ~3 million temp visa holders are structurally locked into the rental market regardless of their income or savings.
Processing blowouts extend rental dependency. A Partner Visa applicant waiting 11 months for temporary status and then 2+ years for the permanent stage will spend 3+ years as a renter before they can access mortgage products — even if fully employed and financially ready to buy.
The 185,000 cap is the binding constraint, not processing speed. Even if processing times halved, the same 185,000 people per year would transition to permanent status. The size of the cap relative to the temp holder population is the structural issue.
International students are the fastest-growing group. In 2024–25, the largest group of migrant arrivals was temporary students — 157,000 people. Many will eventually apply for PR, adding to the pipeline. Skill and Graduate visa pathways from student status create a multi-year temp-to-perm journey measured in years, not months.
Program breakdown — 2024–25 permanent places by category
Skill stream — 131,000 places (~70.8%)
Employer Sponsored (186, 494)~35,700
Skilled Independent (189)~25,000
State/Territory Nominated (190, 491→191)~40,000
Global Talent / Innovation~5,000
Other skill categories~25,300
Family stream — ~54,000 places (~29.0%)
Partner (820/801, 309/100)~40,000
Child, Parent, Other family~14,000
Key context
Former temp visa holders granted PR54.6%
Skill stream on-hand caseload (June 2024)151,756
NOM 2024–25306,000
PR program as % of NOM60.5%
WHAT THIS TAB SHOWS
This section looks at how migrants are faring in Australia's housing market — whether they own homes, how much of their income goes to rent or mortgage, and whether they're living in overcrowded conditions. Data is from ABS Migrant Settlement Outcomes 2025, covering permanent migrants by visa type: Skilled (employer-sponsored or points-tested), Family (joining relatives), and Humanitarian (refugees and protection visa holders).
Migrants Who Own Their Home
62%
All permanent migrants, 2021 Census
National average69%7pp gap
Humanitarian Migrants — Rent Stress
46%
Spending more than 30% of income on rent — the affordability threshold
Skilled migrants19%2× higher
Migrant Median Income
$66K
Total income including wages + government payments, 2022–23
National average$61,171+8% above
Humanitarian — Overcrowding
34%
Living in homes that need at least one more bedroom, 2021
National average6.8%5× higher
Who owns their home? — by visa type and how long they've been in Australia
Home ownership rate (%) by visa stream and arrival period. The dashed line shows the national average (69%). Ownership climbs over time — recent arrivals rarely own; long-term migrants approach national rates. Humanitarian migrants are consistently the lowest.
Recent arrivals (2017–2021)
5–10 years in Australia (2012–2016)
10+ years in Australia (before 2012)
Skilled migrants who've been here 10+ years have 74% home ownership — above the national average. Humanitarian migrants even at 10+ years reach only 51%, reflecting income and wealth disparities.
Housing affordability stress — who is spending too much on rent?
Percentage spending more than 30% of household income on rent — the standard affordability threshold used by government. Above 30% is classified as "rent stress." The dashed line marks the national renter average (30%).
Recent arrivals (2017–2021)
5–10 years here (2012–2016)
10+ years here (before 2012)
55% of newly arrived Humanitarian migrants spend more than 30% of income on rent — vs 15% of newly arrived Skilled migrants. The housing market hits vulnerable migrants hardest.
How does income compare across visa types?
Median total income (wages + government payments) per person aged 15–64, by visa stream, 2022–23 financial year. The dashed line shows the national median ($61,171).
Skilled migrants earn 30% more than the national median. Humanitarian migrants earn 35% less — making housing affordability far more acute for this group, especially in a high-rent environment.
Overcrowding — who is living in homes too small for their household?
Percentage living in dwellings that need one or more extra bedrooms (by Canadian National Occupancy Standard). The dashed line shows the national average (6.8%).
Nearly 1 in 3 Humanitarian migrants live in overcrowded conditions — 5× the national average. Even long-term Humanitarian residents (10+ years) remain at 28% overcrowded, suggesting persistent structural disadvantage.
Quick facts — migrant settlement outcomes at a glance
Citizenship (2021 Census)
All permanent migrants59%
Skilled migrants64%
Humanitarian migrants61%
Family migrants48%
Lived here <5 years4.2%
Lived here 10+ years77%
English & Employment (2021–23)
Speak English well/very well89%
Skilled — English proficiency96%
Humanitarian — proficiency71%
Receiving personal income83%
Skilled income earners88%
Humanitarian income earners60%
Mortgage Stress — >30% income
All permanent migrants21%
National average14%
Humanitarian migrants33%
Family migrants24%
Skilled migrants18%
Recent arrivals (<5yr)21%
FINANCE SECTOR OVERVIEW — ABS 5601 DEC 2025
Australia's mortgage market hit $115.2 billion in new lending in the December 2025 quarter — one of the largest on record — driven by surging investor activity. Investors now account for 40.1% of all new housing loans, the highest share in this data series, up from 24% during COVID lows. Despite record lending volumes, only 10% of owner-occupier loans go to building new homes — 84% are for buying existing stock, meaning lending is inflating prices rather than funding new supply. Refinancing (68,563 loans) is nearly 7× the volume of new construction loans (9,750). Major banks hold 71% market share, though non-bank lenders grew 225% in two years.
Total New Lending (Dec 2025)
$115.2B
New housing loan commitments — one quarter
Mar 2023 trough$59.8B+93%
Investor Share of All Loans
40.1%
Investors competing directly with owner-occupiers for stock
2021 low24%record high
First Home Buyers (Dec 2025)
34,013
OO loans to first home buyers this quarter
Dec 2020 peak46,084−26% vs peak
Non-Bank Lender Growth
+225%
Non-bank lenders grew from $3B to $9.8B/qtr in 2 years
Sep 2023$3.0Bfastest growing
WA Average New Loan Size
$688K
Average owner-occupier mortgage in WA — Dec 2025
NSW average$873K−21% vs NSW
How much is being lent for housing each quarter? — Owner-occupiers vs Investors ($M)
Total new housing loan commitments per quarter, split by borrower type. Investor lending (red) has grown from ~$13B to ~$45B/qtr since 2020 — a 240% increase — outpacing owner-occupier growth. Each bar = one quarter. Data: ABS 5601 Table 1, 2020–2025.
Owner-occupier lending ($M) — buying to live in
Investor lending ($M) — buying as investment/rental
Owner-occupier lending grew from $36B to $70B/qtr since 2020 (+93%). Investor lending grew from $13B to $45B/qtr — a 240% increase. Investors are absorbing a larger portion of available stock each quarter, competing directly against first home buyers for the same homes.
Investor share of the housing finance market — is it rising?
Percentage of all new housing loans going to investors each quarter. When this rises, investors are taking a bigger cut. The dashed line marks the 2021 low (24%). The record of 40.1% was set in Dec 2025.
Investor share hit 40.1% in Dec 2025 — the highest recorded in this series. In Dec 2020 it was just 23%. Every percentage point gained by investors is one fewer for owner-occupiers including first home buyers.
Are first home buyers getting loans? — FHB vs established buyers per quarter
Number of owner-occupier loans taken by first home buyers (cyan) vs established homeowners (violet). FHB numbers peaked in Dec 2020 (government stimulus), then fell sharply as rates rose in 2022–23.
First home buyers (loans/qtr)
Established owner-occupiers (loans/qtr)
FHB loans bottomed at 23,897 in Mar 2023 (rising rates + high prices). Partial recovery to 34,013 by Dec 2025 — but still 26% below the Dec 2020 peak of 46,084. FHBs hold a stable ~36% share of OO loans, suggesting price is the barrier rather than willingness.
Who is actually lending the money? — major banks vs non-banks
New housing loans split by lender type. Major banks = Big 4 and equivalents. Other ADIs = smaller authorised deposit-takers (credit unions, regionals). Non-ADIs = non-bank lenders (Pepper, Liberty, Firstmac etc). Gaps = reporting delays in ABS data.
Major banks (Big 4 + equivalents)
Other ADIs — credit unions, regional banks
Non-ADIs — non-bank lenders
Non-bank lenders are the fastest growing segment — from $3.0B in Sep 2023 to $9.8B in Dec 2025 (+225%). These lenders serve borrowers who don't meet major bank criteria: self-employed, lower deposit, non-standard income.
What are owner-occupiers actually borrowing for? — Dec 2025 quarter
Breakdown of owner-occupier loan purpose. "Existing dwellings" = buying someone's old home. "Construction" = building new. "Refinancing" = switching lenders — no new housing is created. Dec 2025 only.
Only 9,750 loans (10%) funded building new homes in Dec 2025 — vs 79,818 (84%) for buying existing homes. Refinancing loans (68,563) are almost as numerous as all new purchase loans combined. Lending is circulating existing stock, not building new supply.
Is mortgage finance going toward building new homes or switching lenders? — last 6 quarters
Construction loans (cyan) add new housing supply. Refinancing (grey) moves existing loans between lenders — no new homes are created. The gap between these shows how little of Australia's mortgage activity actually addresses the housing shortage.
Construction loans — building new homes (adds housing supply)
Purchase of newly built dwellings
Refinancing — switching lender (no new supply)
Dec 2025: 68,563 refinancing loans vs only 9,750 construction loans — refinancing is 7× larger. Australia's mortgage system is primarily recycling existing stock. This is the lending-side confirmation of the housing supply crisis.
Which states have the most mortgage activity? — owner-occupier loans, Dec 2025
Number of new owner-occupier loans by state in Dec 2025. WA (highlighted amber) shows strong activity relative to its population size.
VIC leads in loan volume (27,889) but NSW leads in loan value ($21.8B) — reflecting Sydney's higher prices. WA has 10,824 loans at $7.4B, with an average loan of $688K — strong activity and more affordable than Sydney or Melbourne on a per-loan basis.
State-by-state — loan count, total lent, and average loan size (Dec 2025)
Average loan size = total value ÷ number of loans. Higher average = higher property prices or larger loans relative to income. WA highlighted.
| State | Loans | Total Lent | Avg Loan | Share |
|---|---|---|---|---|
| NSW | 25,033 | $21.8B | $873K | 26% |
| VIC | 27,889 | $18.9B | $677K | 29% |
| QLD | 20,193 | $14.9B | $735K | 21% |
| WA ★ | 10,824 | $7.4B | $688K | 11% |
| SA | 5,998 | $3.9B | $658K | 6% |
| ACT | 2,358 | $1.6B | $659K | 2% |
| TAS | 1,796 | $906M | $504K | 2% |
| NT | 682 | $351M | $515K | <1% |
| Australia | 94,773 | $69.8B | $737K avg | Dec 2025 |
Does each state's share of loan volume match its share of loan value? — Dec 2025
When a state's value bar (amber) is higher than its volume bar (cyan), properties there cost more than the national average — individual loans are larger. NSW is the clearest example. WA and VIC are close to parity.
Share of loan volume (how many loans) — % of national
Share of loan value (total $ lent) — % of national
NSW has 26% of loan volume but 31% of value — Sydney prices far above average. VIC has the most loans (29%) but only 27% of value, showing Melbourne prices are closer to the national average than Sydney's. WA is 11%/11% — Perth loans track the national average loan size closely.
MACRO OVERVIEW — MAY 2026
Australia's housing crisis cannot be understood without its macro backdrop. The RBA cut rates to a historic 0.10% in 2020, turbocharged borrowing, then hiked 4.25% in 18 months — destroying mortgage affordability for anyone who didn't already own. Meanwhile, inflation ran above wages for 8 consecutive quarters, meaning household purchasing power fell even before price changes. Now in 2026, with inflation re-accelerating to 4.6% — driven by Middle East conflict energy shocks — the RBA has reversed its brief easing cycle and raised rates again. Australia faces a stagflation-adjacent environment: inflation above target, rates rising, and a housing system structurally incapable of responding quickly to demand.
RBA Cash Rate
4.35%
May 2026 — re-hiked after brief 2025 easing cycle. Third consecutive hike
2020–2022 low
0.10%
+4.25pp since
CPI Inflation
4.6%
Annual CPI March 2026 — re-accelerating above RBA target of 2–3%
RBA target band
2–3%
above target
GDP Growth
2.6%
Annual real GDP, Dec 2025 quarter — strongest in nearly 3 years
2024 trough
0.8%
recovering
Unemployment Rate
4.3%
Mar 2026 — near historic lows. Tight labour market constrains construction supply
50-year low (Oct 2022)
3.44%
near historic low
Wage Growth (WPI)
3.4%
Wage Price Index annual Dec 2025 — below CPI for 8 quarters, now catching up
vs CPI Mar 2026
4.6%
real wages −1.2%
GDP per Capita Growth
+1.0%
Real GDP per capita YoY, Dec 2025 — first positive reading after 6 consecutive negative quarters
Dec 2024 (prior yr)
−0.3%
↑ turning positive
Federal Government Net Debt
$549B
Commonwealth net debt 2024–25 — 19.7% of GDP. Rising again after brief surpluses
2025–26 projected
$571B
20.1% of GDP
Budget Balance
−$27.6B
Underlying cash deficit 2024–25 — returned to deficit after two years of surplus
2023–24 surplus
+$15.8B
back in deficit
The rate cycle destroyed housing affordability — cash rate vs first home buyer loans (2020–2025)
The near-perfect inverse relationship between interest rates and housing access. When the RBA held rates at 0.10%, FHB loans surged. Each rate hike crushed demand. The 2025 cuts briefly revived lending — but March 2026 re-hikes reversed that. Bars = FHB loans per quarter (right axis). Line = cash rate % (left axis).
RBA cash rate (%) — left axis
First home buyer loans (number) — right axis
The mechanism: At 0.10% rates (Dec 2020), FHB loans hit 46,084 — a 25-year high driven by cheap money and government stimulus. As rates hit 4.35%, FHB loans fell to 23,897 (Mar 2023) — a 48% collapse. Every 25bp hike adds ~$45/month to a $700K mortgage. The 4.25% hiking cycle added roughly $1,674/month to that same loan — a 56% increase in repayments with zero price change.
Inflation vs wage growth — did Australians keep pace with rising prices?
Annual % change in consumer prices (CPI, red) vs wages (Wage Price Index, cyan) vs the RBA's 2–3% target band. When CPI exceeds wages, purchasing power falls — including the ability to service a mortgage or save for a deposit.
CPI inflation (annual %)
Wage growth — Wage Price Index (annual %)
RBA target ceiling 3%
From mid-2021 to late 2023, inflation consistently outpaced wage growth — meaning Australians' real purchasing power fell for 10+ consecutive quarters. This hit housing hardest: deposits erode in real terms, mortgage serviceability worsens, and discretionary saving collapses.
Real wage growth — are Australians actually getting ahead? (wages minus inflation)
Real wage growth = wage price index minus CPI. When negative (red bars), wages are growing slower than prices — living standards are falling in real terms. This is the measure that determines whether a household can afford to buy a home or meet mortgage repayments.
Real wages fell −4.5% in late 2022 — the worst in at least three decades. For a household earning $100K, this meant ~$4,500 less purchasing power in real terms. Mortgage repayments surged simultaneously. Housing affordability was being squeezed from both ends at once. Real wages only turned briefly positive in 2024 before inflation re-accelerated in 2026.
GDP growth — is Australia's economy strong enough to fix housing?
Annual GDP growth (%). Australia avoided recession but growth slowed sharply in 2023–24 to near-stall. GDP per capita actually fell for 5 consecutive quarters — growth only looked positive because population (from migration) was outpacing economic output per person.
Headline GDP growth masks a per-capita recession. Developer feasibility depends on strong economic activity. When growth is weak and interest rates high, projects get shelved — adding to the supply gap at precisely the worst time.
Unemployment at 50-year lows — what it means for housing supply
Monthly unemployment rate (%). Australia reached its tightest labour market in half a century in 2022. A paradox for housing: low unemployment means strong demand, but also means construction workers are scarce and expensive — directly limiting how fast homes can be built.
At 3.5% unemployment (2022–23), 1 in 3 construction occupations faced national shortages. Trades earning 30–40% more than pre-COVID. This directly inflated construction costs by 35%, made project feasibility harder, and contributed to the completion backlog — build times increased 34% since 2020.
What the rate cycle meant in dollars — monthly repayments on a $700K mortgage at each cash rate level
Estimated monthly repayment on a $700,000 owner-occupier mortgage over 25 years, at standard variable rates (cash rate + ~2% lender margin). This is the direct, household-level impact of the rate cycle on housing affordability. A borrower who took out a loan in 2021 faced a $1,674 increase in monthly repayments by 2023 — with no change in the price of their home.
Monthly repayment — cash rate at its lowest (2.10% SVR = 0.10% + 2%)
Monthly repayment at peak rates (6.35% SVR = 4.35% + 2%)
2021 — Rates at floor
Cash rate0.10%
Standard variable rate~2.10%
$700K loan repayment$2,967/mo
2023 — Rates at peak
Cash rate4.35%
Standard variable rate~6.35%
$700K loan repayment$4,641/mo
2026 — Re-hiked
Cash rate4.35%
Standard variable rate~6.35%
Increase vs 2021+$1,674/mo
The 2026 risk — stagflation and what it means for housing
Stagflation = high inflation + weak growth. Australia isn't there yet but the risk is real. The Middle East conflict has driven energy prices sharply higher, re-igniting inflation the RBA thought was tamed. This has forced rate re-hikes that will further suppress housing affordability and developer confidence.
Current conditions (May 2026)
CPI inflation4.6%
RBA cash rate4.35%
GDP growth (annual)2.6%
Real wage growth−1.2%
Unemployment4.3%
RBA vote to hike Mar 20265–4
Housing-specific macro risk
Construction cost inflation since 2020+35%
Build time increase since 2020+34%
New dwelling CPI (Dec 2025 yr)+3.0%
Housing CPI (Dec 2025 yr)+5.5%
Homes Accord target~1M behind
Quarterly lending (Dec 2025)$115.2B
What this means for property
Higher rates → lower borrowing capacity↓
Real wages negative → less saving↓
High build costs → fewer projects↓
Labour shortage → slow completions↓
Migration at record → demand up↑
Net result: supply gap widens furthercrisis
PROPERTY PRICES — ABS TOTAL VALUE OF DWELLINGS, DEC 2025
Australia's national mean dwelling price crossed $1 million for the first time in 2025, reaching $1,074,700 in December. The total value of residential dwellings hit $12.3 trillion — up $4.45 trillion in five years. But the national figure masks dramatic divergence: Western Australia rose 16.8% in a single year to $1,014,200, while Queensland surged past Victoria to $1,066,000. Melbourne — flat since 2022 — remains the major outlier, with prices barely above where they were three years ago. The rate cycle is written directly into these charts: prices peaked in late 2021, troughed when hikes hit, then recovered as cuts began — before re-accelerating in 2025 despite inflation risks. Source: ABS Total Value of Dwellings (formerly RPPI cat. 6416.0). CC BY 4.0.
National Mean Dwelling Price
$1.075M
All dwellings, Australia — Dec 2025. First time above $1M
Dec 2020 baseline
$740K
+45% in 5 years
WA Mean Price (Perth)
$1.014M
Up 16.8% in the past 12 months — fastest growth nationally
Sep 2022 low
$628K
+61% in 3 yrs
Queensland Mean Price
$1.066M
Now higher than Victoria. +42% since Dec 2022 trough
Dec 2022
$749K
+42% in 3 yrs
Total Dwelling Market Value
$12.3T
Total value of all residential dwellings in Australia, Dec 2025
Dec 2020
$7.85T
+$4.45T added
Price-to-Income Ratio
~10×
National mean dwelling price vs average household income (~$108K)
2010 ratio
~6×
decade high
How have Australian dwelling prices moved since COVID? — national mean price, 2020 to 2025
Mean price of all residential dwellings across Australia, quarterly. The rate cycle is directly visible: ultra-low rates fuelled a 24% price surge to Dec 2021. Rate hikes pushed prices back down through 2022. Cuts in 2025 reignited growth. Australia crossed the $1M mean price threshold for the first time in mid-2025. Source: ABS Total Value of Dwellings, Dec 2025 ($'000).
The national mean dwelling price rose $134,700 in a single year (Dec 2024 to Dec 2025). In the five years since Dec 2020, the mean price has increased by $334,700 — equivalent to more than three years of average household income added to the cost of a home. The crossing of the $1M threshold is a structural affordability milestone.
Which states have grown fastest? — mean price by state since Sep 2022 ($'000)
Mean dwelling price by state, quarterly. WA (amber) and QLD (red) have dramatically outperformed NSW and VIC. VIC (violet) has been essentially flat for three years, while WA has risen 61% from its 2022 trough.
NSW — Sydney market (highest absolute price)
VIC — Melbourne (flattest growth nationally)
QLD — Brisbane (surpassed Victoria)
WA — Perth (fastest growth nationally)
QLD surpassed Victoria in mean dwelling price in mid-2024 — a reversal that would have seemed impossible a decade ago. Perth (WA) crossed $1M mean price in Dec 2025. Melbourne has barely moved in 3 years.
Which state grew fastest in the past year? — annual price change, Dec 2024 to Dec 2025
Percentage change in mean dwelling price by state over the 12 months to December 2025. WA's 16.8% growth is nearly triple the rate of NSW and VIC. Source: ABS Total Value of Dwellings media release, 10 March 2026.
WA grew at 16.8% annually — nearly three times the rate of NSW (7.2%) and more than twice Victoria (6.7%). SA and QLD also significantly outperformed the east coast. This divergence reflects WA's mining sector strength, population inflows, and significantly lower entry prices compared to Sydney and Melbourne.
Total value of all residential dwellings in Australia — the $12.3 trillion market ($B)
Combined value of every residential dwelling in Australia, quarterly. This is the largest single asset class in the country — larger than the ASX. It fell briefly in 2022 when rates rose, then resumed its climb to a new record. The household balance sheet is now deeply tied to property values. Source: ABS Total Value of Dwellings, Dec 2025.
$4.45 trillion in property wealth was created between Dec 2020 and Dec 2025 — the equivalent of roughly 2× Australia's annual GDP. This wealth is overwhelmingly held by existing homeowners and investors. The asset boom has widened the wealth gap between those who own property and those who don't.
State-by-state price comparison — Dec 2025
Mean dwelling price, annual change, and 3-year change by state. Illustrates the dramatic divergence between the WA/QLD story and the flat VIC market.
| State | Mean Price | Annual change | vs Sep 2022 |
|---|---|---|---|
| NSW | $1,301,100 | +7.2% | +14.5% |
| QLD | $1,066,000 | +15.4% | +40.4% |
| WA ★ | $1,014,200 | +16.8% | +61.5% |
| ACT | $973,800 | +1.8% | +5.7% |
| VIC | $933,100 | +6.7% | +3.5% |
| SA | $938,100 | +12.4% | +49.3% |
| TAS | $703,800 | +9.1% | +3.9% |
| NT | $580,000 | +7.6% | +17.9% |
| Australia | $1,074,700 | +10.0% | +20.6% |
The WA price story — why Perth surged 61% in 3 years
Contributing factors to WA's extraordinary price growth, and how Perth compares to other capitals on key affordability metrics.
Why WA outperformed (structural factors)
Lowest entry price of all capitals in 2020–22$628K
Mining boom driving high incomes in WAstrong
Interstate migration into Perth accelerating↑ demand
Rental vacancy rate — Perth metro~0.8%
New dwelling completions — WA (2024)low
Dec 2025 mean price — now above $1M$1,014K
Dec 2025 vs Dec 2024 quarterly change by state
WA — fastest growing+7.5% qtr
QLD+4.8% qtr
SA+4.5% qtr
NSW+1.7% qtr
National+2.7% qtr
Policy Risk — Negative Gearing & CGT Reform (Flagged July 2027)
Reports suggest proposed reforms may restrict negative gearing to new builds only and alter capital gains tax treatment from July 2027. If legislated, this could materially redirect investor demand toward new housing supply — reducing competition for existing stock while potentially increasing development feasibility. Source: Reuters, May 2026. Unconfirmed policy.
MARKET PULSE — DATA SWEEP 12 MAY 2026, ~4:10PM AWST
Current market signals curated from public releases. Data reflects conditions as at 12 May 2026. Sources include ABS official releases, CoreLogic/Cotality Home Value Index, SQM Research vacancy and listings data, ANZ Research, and NAB Housing Monitor. Private sector data is sourced from public media releases and is attributed accordingly — it is not ABS data and does not carry CC BY 4.0 licence. This tab will be updated with each monthly data sweep.
National Dwelling Values — Apr 2026
+0.3%
Monthly growth — slowest since Jan 2025. Sydney and Melbourne both fell 0.6%
Source
CoreLogic HVI
slowing
National Rental Vacancy — Apr 2026
1.2%
35,258 vacant rentals. Up from 1.0% in March — slight easing but structurally tight
Source
SQM Research
tight
National Asking Rents — YoY
+7.3%
Annual rent inflation remains elevated despite slight vacancy improvement
Source
SQM Research
elevated
Total Property Listings — Apr 2026
234,469
−0.1% monthly, −3.3% annually. Supply remains constrained vs prior year
Source
SQM Research
−3.3% annual
Total Dwelling Approvals — Mar 2026
17,300
Fell 10.5% — pipeline weakened sharply. Future supply at risk
Source
ABS Building Approvals
−10.5%
Private House Approvals — Mar 2026
10,194
+0.9% — detached housing approvals held steady while apartments weakened
Source
ABS Building Approvals
+0.9%
Apartment Approvals — Mar 2026
6,632
−26.0% — high-density supply pipeline collapsing materially
Source
ABS Building Approvals
−26.0%
Dwelling Commencements — Dec Qtr 2025
53,567
+8.0% quarterly — construction starts improved. Private houses −0.9% to 28,469
Source
ABS Building Activity
+8.0% qtr
Net Overseas Migration — 2024–25
306,000
Easing from 429,000 peak but remains 3.8× the long-run average of 80,000
Source
ABS Overseas Migration
still elevated
RBA Cash Rate — May 2026
4.35%
Held 6 May 2026. High rates continue suppressing borrowing capacity
Source
RBA
restrictive
Housing CPI Inflation — Annual
+6.5%
Rents +3.7% · New dwellings +4.5%. Housing a major inflation driver
Source
ABS CPI
above target
Capital City Prices — Past 12 Months
+9.3%
Perth, Brisbane and Adelaide outperforming. Sydney and Melbourne lagging
Source
NAB Housing Monitor
diverging
Bank forecasts — where do major lenders see prices heading?
Forward-looking price forecasts from ANZ Research and NAB Housing Monitor, April–May 2026. Note: bank forecasts carry significant uncertainty and should not be relied upon as investment advice.
ANZ — Combined capitals 2026 forecast+2.8%
ANZ — Combined capitals 2027 forecast+2.1%
NAB — Capitals past 12 months (actual)+9.3%
Outperforming marketsPerth · Brisbane · Adelaide
Underperforming marketsSydney · Melbourne
Sydney Apr 2026 monthly change−0.6%
Melbourne Apr 2026 monthly change−0.6%
Major banks expect national price growth to slow materially in 2026–27 (+2.8% then +2.1%) after the strong run of 2024–25. The east coast divergence is significant — Sydney and Melbourne declining monthly while smaller capitals hold. This reflects the affordability ceiling in the largest markets and continued relative value in Perth and Brisbane.
Key signals — what this data sweep tells us
Synthesis of the 12 May 2026 data sweep across dwelling values, approvals, rentals, migration, and rates.
Apartment approval collapse is the biggest risk. −26% in March 2026 means the higher-density supply pipeline — which is critical for housing affordability in major cities — is weakening materially at exactly the wrong time.
Sydney and Melbourne are softening. Monthly declines of −0.6% in both cities while national growth slows to +0.3% — the east coast affordability ceiling is starting to bite.
Migration easing but not resolved. 306,000 NOM in 2024–25 is down from 429,000 — but still 3.8× the long-run average. Rental vacancy at 1.2% confirms demand pressure has not meaningfully abated.
Policy risk is the wildcard. If negative gearing reforms proceed from July 2027, investor behaviour could shift materially toward new builds — potentially improving development feasibility while reducing competition for existing stock.
Data sources — 12 May 2026
ABS Building Approvals (cat. 8731) — CC BY 4.0
ABS Building Activity (cat. 8752) — CC BY 4.0
ABS Overseas Migration — CC BY 4.0
ABS CPI (cat. 6401) — CC BY 4.0
RBA — public release
CoreLogic/Cotality Home Value Index — public media release, Apr 2026
SQM Research Vacancy Report — public media release, May 2026
ANZ Research Housing Forecast — public media release, Apr 2026
NAB Housing Monitor — public media release, Apr 2026
Reuters — policy reporting, May 2026
Private sector data (CoreLogic, SQM, ANZ, NAB) is sourced from publicly available media releases. It is not affiliated with HousingIntel and does not carry a Creative Commons licence. HousingIntel presents this data for informational purposes only and makes no representation as to its accuracy. Not financial advice.