Don't forget demand in trying to fix housing

May 26, 2025

While not disagreeing with any of the five solutions to solving the housing crisis, I find it extraordinary that the issue of demand was not addressed. And yet, Australia has experienced significant demand in recent years because of very high population growth. About four-fifths has come from net overseas migration which even exceeded half a million in 2023.

The other aspect of demand, natural increase, is still over 100,000 but decreasing gradually. The maths is simple really; divide your total population growth by 2.5 (average number of people per dwelling) and that’s how many new homes you need that year. So, for every quarter million people, you need 100,000 new dwellings. And if your population growth is half a million, you need 200,000.

How many new homes were built in Australia in 2024? 177,000. That figure was not enough to meet new demand, let alone accumulated demand. So, by all means increase supply by the five means listed, but let’s work on demand as well, by reducing net overseas migration to at least a point where new housing matches new people. Better still, reduce it to a point where accumulated demand is also addressed.