Population growth raises construction industry alarm
Australia’s population increased by 651,200 residents in the 2023 calendar year, while only 172,725 dwellings were completed.
According to the Australian Bureau of Statistics (ABS), Australia’s population rose by 2.5 per cent to 26.97 million people in 2023, with net overseas migration driving 84 per cent of this growth and natural increase accounting for the remaining 16 per cent.
In fact, natural increase dropped back 6.4 per cent over the year compared to 2022, while net migration was 26.3 per cent higher in 2023. Even so, the estimated resident population is roughly 25,000 people below its pre-pandemic trajectory, based on the rate of growth from the decade to 2020.
It’s raw data that has led Housing Industry Association (HIA) chief economist Tim Reardon to call for more government intervention to ensure that the current supply woes plaguing the nation do not get rapidly worse.
While he acknowledged that migration seemed to be easing off based on the figures from December 2023, the economist urged “swift policy action from all levels of government”, to address the “the stark demand/supply imbalance in new home building”.
“HIA estimates that Australia’s future underlying housing demand sits above 200,000 homes per year. Unfortunately, only 172,725 dwellings were completed in the calendar year 2023, This will add to rental and house price pressures,” Reardon said.
In the economist’s view, managed migration needs to be a part of the picture in balancing the equation between population growth and housing needs.
“The building industry has consistently argued for stable and reliable population growth. The boom/bust cycles in migration seen over the pandemic period leads to undesirable economic, social and business outcomes,” he argued.
HIA advocates for the adoption of a “migration program that delivers adequate skilled migrants in construction and building professions and trades to meet Australia’s ongoing housing needs”, while managing wild fluctuations.
On a state level, acting CEO of the Urban Taskforce, Stephen Fenn, said that the figures out of NSW painted an “awful picture of the severity of the housing supply crisis”.
“ABS figures show that in 2023 the population of NSW grew by 185,500. Assuming an average household of 2.5 people per home, this would equate to 74,200 new homes needed to accommodate this additional population,” he noted.
“Yet ABS dwelling completion data for the year 2023 showed that only 46,706 dwellings were completed.”
The Urban Taskforce is also calling for government action to result from this data, advocating for a number of measures, including the implementation of a fast track planning pathway for private housing developments with a capital investment value of more than $50 million.
The lobbyist is also calling for the NSW government to underwrite 10-year defect liability insurance scheme and a waiver of the NSW Housing and Productivity Contribution on homes completed over the next five years to support the building industry.