Vacancy Rates Near 1%: Australia’s Rental and Housing Markets Under Pressure — Sydney Auction Clearance Rate at 74%

Week’s Key Focus

Australia is facing a deepening housing crisis as construction falls well short of targets while migration surges to twice pre-pandemic levels, driving up property prices, rents, and pressure on public services. According to the Australian Bureau of Statistics (ABS), 110,000 new migrants arrived in the March quarter of 2024, pushing the annual intake close to 500,000 – accounting for three-quarters of the nation’s population growth. The Institute of Public Affairs (IPA) criticised the federal government for creating a “new normal” of high migration, claiming it has left ordinary families “poorer.”

The Housing Industry Association (HIA) warned that Australia is falling badly behind its National Housing Accord target of 1.2 million new homes by 2030. Only 168,000 dwellings were started in 2024, and projections suggest just 986,000 will be built over the next five years. Industry challenges – including limited land supply, slow planning approvals, heavy taxes and fees, higher interest rates, skill shortages, and rising construction costs – are further straining the sector.

The combination of record migration and limited housing supply has also sparked social tensions. Recent mass protests in several cities saw pro- and anti-immigration groups clash, underscoring deep community divisions. Analysts note migration pressures are being felt first in the rental market, before spilling into home ownership. National vacancy rates have plunged to around 1 per cent – near historic lows.

Although net overseas migration fell to 341,000 in the 2024 financial year – down from a record 538,000 in 2022/23 – it remains well above long-term averages. Experts warn that unless migration levels are better aligned with housing supply, Australia risks prolonged per capita economic decline. Meanwhile, home buyers and renters are already paying the price, with property values in Sydney, Melbourne, and Brisbane hovering near record highs.

Northwest Sydney

Auction Results Last Week

Sydney: 1153 homes went to auction, with 738 results reported. A total of 547 properties were sold, delivering a clearance rate of 74%. The total auction value reached $677,613,267, with a median house price of $1,740,000.
Melbourne: 1246 homes went to auction, with 948 results reported. A total of 698 properties were sold, also recording a clearance rate of 74%. The total auction value was $589,899,776, with a median house price of $1,006,500.