The 5 Aussie markets being crushed by low supply

According to Arjun Paliwal, founder and head of research at InvestorKit, the supply shortage is plaguing renters and buyers alike.

“Australia’s housing supply crunch is impacting both the sales and rental market at a time when we are seeing growing demand due to rising migration, a decline in average household size, and a population concentration in Australia’s capital cities,” said Mr Paliwal.

He cited inefficient planning, rising construction costs, an unfavourable policies towards investors are some of the factors contributing to the supply shortfall.

“Australia’s housing crisis will not resolve until we nail the fundamentals – supply and demand,” said Mr Paliwal. “Without this, Australians will continue to feel the crunch in both regional and metro areas across the nation.”

Five markets are feeling the effects of the supply crisis more acutely than the rest, according to InvestorKit. Below are the five markets affected worst by low housing supply.

1. Robina, Gold Coast, Qld

The canal-side suburb of Robina in the Gold Coast faces the most extreme supply challenges than any other market in the country, according to InvestorKit’s research.

Between 2012 and 2022, Robina’s population increased by 15 per cent. During the same 10-year period, housing supply plummeted a whopping -45 per cent – and consistently low development approvals suggest that situation is unlikely to improve in the next few years.

In the sales market, Robina house listings have an annual decline rate of -0.27 per cent, while rental vacancy has been a crisis point of below 1 per cent for the past two years, leading to an 11 per cent rental growth rate annually.

2. Penrith, NSW

Down in NSW, the western Sydney suburb of Penrith is another housing market being crushed under the burden of high demand and low supply.

The last decade saw a 24 per cent rise in Penrith’s local population, but a -22 per cent drop in housing supply. Inventory in the Penrith sales market has reportedly been well below the “balanced” point for the last 12 months.

Renters are bearing the brunt of the suburb’s rental supply crisis, with annual rent growth rates of 10 per cent.

3. Brisbane Inner North, Qld

Suave, stylish inner north Brisbane might look good on the surface, but its veneer is hiding an ugly housing supply crisis.

Over the past 10 years, the population of inner north Brisbane skyrocketed 28 per cent, but housing supply shot down -31 per cent.

While the balanced established supply and low incoming supply made this area somewhat resilient against interest hikes, InvestorKit noted that the extremely low new supply levels have worsened the situation.

In the rental markets, crisis-level low vacancies of below 1 per cent have caused rents to hike up 16 per cent each year.

4. Barossa, SA

The Barossa Valley in South Australia is another region being severely affected by the housing supply crisis.

Between 2012 and 2022, the population of the Barossa Valley grew 15 per cent, but housing supply sank down -42 per cent.

In the Barossa sales market, there are only two months’ worth of properties currently on the market – well below the balanced mark – which has unsurprisingly led to a spike in house prices.

Renters are also experiencing a major supply crisis, with rents rising 18 per cent each year.

5. Bayswater-Bassendean, WA

Over in Perth’s north-east, the area of Bayswater-Bassendean saw population rise 6 per cent since 2012, while for-sale listings stayed the same.

In addition, new supply declined over the decade between 2012 and 2022, worsening the supply crisis.

Inventory in the sales market is on a marked downward trend, while extremely low rental vacancies are leading to annual rent hikes of 17 per cent for Bayswater-Bassendean’s tenants.