Demand Surges, Supply Slows: What’s Next for Australia’s Housing Market?
As we approach the final months of the year, the Australian housing market continues to demonstrate its remarkable resilience and its growing imbalance.
The latest national data reveals a significant decline in new apartment completions. Developers, facing cost pressures and slowing pre-sales, have paused or delayed projects that are no longer financially viable. Apartment completions are forecast to fall to approximately 52,500 this year, down from 64,000 in 2024 and well below the 81,500 originally predicted two years ago. It’s a figure that highlights the widening gap between housing demand and supply, a fundamental driver of our market’s continued strength.
Meanwhile, investor confidence has made a strong return. Since the Reserve Bank began cutting interest rates earlier this year, credit growth for housing investors has risen to 6.6%, outpacing owner-occupier growth at 5.7%. Queensland, in particular, has seen a notable upswing in investor activity as yields stabilise and rental demand remains unrelenting.
Adding to this competitive landscape, financial stress levels among mortgage holders are easing. According to the Reserve Bank, fewer than 1% of borrowers are now at risk of falling behind on repayments, the lowest level since 2022. Mortgage arrears peaked in late 2024 and have been trending down ever since, suggesting that rate cuts and wage growth are starting to restore balance to household budgets.
At the same time, first home buyers are re-entering the market in record numbers. The removal of income caps, previously $125,000 for singles and $200,000 for couples has opened the door for an estimated 70,000 new buyers under the revised First Home Buyer Grant. Brokers across the country are reporting queues of new applicants eager to take advantage of the scheme. Interestingly, this new wave of buyers is more informed than ever, using digital tools and social platforms to research, plan, and adopt strategic pathways into home ownership.
The result of this simultaneous surge in investor and first home buyer activity is a market of intensifying competition amid shrinking supply. In September, national home prices recorded their sharpest monthly rise in nearly two years. The Gold Coast, in particular, has stood out, with property prices climbing 9.2% year-on-year, closing the gap on Sydney as one of the country’s most expensive markets. Brisbane leads the growth charts with a 10.23% annual increase, reinforcing Southeast Queensland’s position as one of the nation’s hottest regions.
However, beneath this momentum lies a pressing challenge: supply. Without significant reform, the imbalance will continue to inflate prices and restrict affordability. The solution demands cooperation across all three levels of government, federal, state, and local to deliver faster approvals, tax incentives, and greater support for developers to bring projects to market.
The call to action is clear: streamline zoning, unlock financing for stalled developments, and implement incentives that encourage risk-taking in the construction sector. It’s time for governments to work together, without political bias, to address the single biggest constraint on our housing future, the chronic undersupply of homes.
DON’T FORGET ABOUT:
Bellissimo Charity Lunch at the Mondrian
Ray White Bell Group extends to you a personal invitation to our inaugural Bellissimo Charity Lunch, a new chapter in our long tradition of community support.After 31 years of hosting our annual ball in aid of Muscular Dystrophy, we’re embracing the Gold Coast lifestyle with a fresh format: a stylish Friday afternoon lunch at the new Mondrian Hotel in Burleigh Heads on Friday, 24 October.
Set around the pool club, the event will feature chic European-inspired dining, fresh oysters, and a relaxed, elegant atmosphere. Tickets are from $299 per person, with larger tables already filling fast, but spaces still available for couples, friends, and small groups. All proceeds will support children living with muscular dystrophy, a vital cause that is close to our hearts.
I’ll be back in a fortnight with more insights. Until then, enjoy life and take care.
Until next time,
Andrew Bell, OAM
Chairman | Ray White Bell Group
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