Worst Housing Deficit In History = Once in a Lifetime Opportunity

We’re all aware net migration in Australia is one of the drivers behind the historic growth in the property market. In the 12 months to September 2023 there were an additional 264,000 homes needed nationally, and there were only 170,000 delivered, a large part of the additional homes needed was due to the net migration targets set by the government.

Typically when populations grow organically, we see children grow into adults in an orderly fashion, giving time for the housing supply to swell with the aging of the children into adults. With migration, there is a swelling of working age adults who all need homes straight away. We can compare the number of home constructions started against the number of working adults to see how the current housing deficit fares historically.

PropTrack released a graph recently showing exactly that, “Growth in working age population vs. commencements”. This shows the growth in families requiring houses against how many new builds have been started. There are only 3 periods where this ratio goes above 2: 2001, 2009 and now 2023 but it get’s worse, in 2023 this ratio has gone above 3.

This is hitting both sides of the supply and demand equation: not enough supply and increasing demand. It’s not all bad news though: when something is scarce and in high demand there is a corresponding increase in it’s value. This is a once in a lifetime opportunity to create life changing wealth, particularly in Perth which is the epicentre of this housing shortage and where we’ve seen such massive growth and will continue to see this into the foreseeable future as there is no end to this market imbalance in sight.