Australia’s housing crisis is intensifying, with a new whitepaper released by InvestorKit, Australia’s Housing Supply Crunch: 25 Undersupplied Regions FY 24/25, uncovering the metro and regional areas where available housing is struggling to keep pace with growing demand. A nation-wide analysis of 330 regions highlights 25 key markets where housing supply remains critically low.
CEO and Founder of InvestorKit, Arjun Paliwal, said, “Australia is experiencing a chronic supply crunch, causing property prices to skyrocket. Our housing market is among the least affordable in the world due to growing demand, low established supply and a decline in national average household size, and we are still a long way from resolving the issue.”
InvestorKit, which won ‘Buyer’s Agency of the Year’ two consecutive years in a row at the REB Awards 2023 and 2024, is Australia’s leading data-driven property investment advisory firm. InvestorKit measures housing supply levels by its Supply Shortage Score (SSS) and publishes a Housing Supply whitepaper each year. These undersupplied regions are poised for strong growth in the coming year, making them hotspots for potential investment.
According to this year’s whitepaper, 5 of the key markets that are facing the most severe supply crunch in 2025 are:
- Fremantle (Greater Perth): Fremantle’s population (underlying demand) increased by +14 per cent in the past decade, whilst the number of for-sale listings (supply) decreased by -29 per cent. The new house building approval rate decreased by -77 per cent in the past 3 years.
- Bayswater – Bassendean (Greater Perth): Bayswater – Bassendean’s population (underlying demand) increased by +7 per cent in the past decade, whilst the number of for-sale listings (supply) decreased by -21 per cent. The new house building approval rate decreased by -65 per cent in the past 3 years.
- Joondalup (Greater Perth): Joondalup’s population (underlying demand) increased by +4 per cent in the past decade, whilst the number of for-sale listings (supply) decreased by -31 per cent over the same period. The new house building approval rate decreased by -62 per cent in the past 3 years.
- MacKay (Regional QLD): Mackay’s population (underlying demand) increased by +7 per cent in the past decade, whilst the number of for-sale listings (supply) decreased by -40 per cent over the same period. The new house building approval rate decreased by -50 per cent in the past 3 years.
- Gladstone (Regional QLD): Gladstone’s population (underlying demand) increased by +8 per cent in the past decade, whilst the number of for-sale listings (supply) decreased by -31 per cent over the same period. The new house building approval rate decreased by -48 per cent in the past 3 years.
The whitepaper’s findings also underscore the persistent challenges facing the Australian rental market. While vacancy rates have improved slightly in many capital cities, they remain at crisis levels below 1 per cent in several regional markets, exacerbating rental pressures.
CEO and Founder of InvestorKit, Arjun Paliwal, said “The housing supply shortage cannot be resolved by simply building more homes. If that approach were effective, Australia wouldn’t find itself in this situation despite a 20 per cent increase in total dwelling stock over the past decade. Instead, we see the number of for-sale listings is 30 per cent lower than it was 10 years ago.”
“Addressing this crisis requires a multifaceted approach. Australia needs a more evenly distributed population, better infrastructure services in regional areas, a more efficient planning system to streamline land supply and provide development certainty, and a fairer tax system to encourage stock mobility. Additionally, we must support more diversified housing providers, such as Build-to-Rent, and foster an investor-friendly environment, free from unnecessary criticism by governments and media. These steps are essential to create a sustainable housing market for the future.”
Long-term solutions will take time to implement and deliver meaningful change. In the short term, however, markets experiencing the most severe supply shortages are expected to maintain strong price growth amid the ongoing imbalance between supply and demand.
