Australia Faces Population Surge Challenge: Annual Housing Costs Jump 9%, Pressure on Housing Intensifies — Sydney Auction Clearance Rates At 71%

Week’s Key Focus

Australia is currently grappling with a rapid population increase and a tightening housing market, drawing widespread attention. Recent data reveals that by the end of September 2023, Australia’s population surged by 659,800, reaching 26.8 million, surpassing previous forecasts significantly. This growth, largely fueled by a substantial influx of overseas immigrants, accounted for 83% of the annual population increase, equating to 548,800 people, primarily due to temporary visas for work or study purposes. This considerable rate of growth has exerted additional pressure on the housing market.

Despite the pressures of rising interest rates and other cost-of-living challenges, Australia’s housing prices have remained robust, setting a new national record with an average price of $765,762. This scenario is primarily due to the limited housing supply amidst strong demand. Analysis by CoreLogic indicates that nearly 90% of the market experienced price increases, and the rental market has also seen significant rent hikes, with 94.2% of markets recording annual rent increases.

The rapid pace of Australia’s population growth and the resulting strain on the housing market have caught the attention of policymakers. A 2007 intergenerational report had predicted the population would not reach 26.8 million until 2034-35, yet this milestone was achieved in 2023, highlighting a systematic underestimation that has intensified the challenge of providing adequate housing. This necessitates more robust government action in land and population investment to address the issue. The continuous rise in housing values and rents further underscores the urgent market demand for more housing.

The significant impact of Australia’s swift population growth, especially due to a sharp increase in overseas migration, has led to continuous rises in housing prices and rents. This trend emphasizes the importance of enhancing housing supply and management policies to meet the demand for housing effectively.

Auction Results Last Week

Sydney: 1136 properties were auctioned, with 734 auction results reported. Of these, 520 properties were sold, achieving a clearance rate of 71%. The total auction value was AUD 631,274,770, with a median house price of AUD 1,700,000.
Melbourne: 1516 properties went to auction, with 1125 auction results reported. Out of these, 697 properties were sold, resulting in a clearance rate of 62%. The total auction value was AUD 584,667,933, with a median house price of AUD 1,050,000.