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Turns Out Australia Actually Has An 'Oversupply' Of Homes

‘We see that there is a surplus’

Turns Out Australia Actually Has An 'Oversupply' Of Homes Image: Pixabay

Australia has an oversupply of up to 164,000 dwellings which appears to counter suggestions the nation is suffering a housing shortage, a new study has found.

Australian National University (ANU) Associate Professor Ben Phillips and researcher Cukkoo Joseph analysed 15 years' worth of Census data and building approvals, and found Australia had an oversupply in some markets such as parts of inner city Sydney, Melbourne and Brisbane.

"The surplus is not particularly substantial, but certainly suggest that housing supply in and of itself is probably not the primary driver of house-price growth in Australia. There are other factors that are going on," Dr Phillips said.

"We've looked at factors like changes in household types and dwelling types and unoccupied dwellings which we don't think have been taken into account in other studies in any substantial way in the past, and certainly not at the regional level.

"The standard line of governments and industry seems to be that housing supply is a big problem in Australia. No doubt there are some areas where it is. But overall we don't see the housing shortage that's often talked about - in fact we see that there is a surplus."

In addition to analysing data from the 2001 and 2016 Census, the ANU researchers looked at Australian Bureau of Statistics building approvals and survey of income and housing.

"We appear to have built enough dwellings, and there's an oversupply in some markets such as some parts of inner city Sydney, Melbourne and Brisbane, which could have interesting implications for the economy," Dr Phillips said.

"If this research is right, it suggests we've built enough dwellings, and there's not likely to be any great gain in building more houses in addition to what's required."

In the regions, many homes were built in mining centres over the past 15 years before the mining boom ended.

"Particularly in outback Western Australia, regional WA and north Queensland, many of these areas have a housing surplus," Dr Phillips said.

"We also find Canberra has a housing surplus, especially among higher-density dwellings in the town centres.

"We've found that we've built more than what population growth would require.

"It doesn't mean that it won't get soaked up in coming years, but it does suggest there won't be as much need for new home building in the near future, which could have knock-on to the broader economy."