New housing supply versus demand #2 – Capital Cities

This week is about the status between new housing supply and underlying housing demand across the eight Australian capital cities.

Many of the caveats as outlined last week apply here too; being that assumptions have been made about underlying housing demand based on the number of adults in the local population mix and new housing supply regarding unoccupied private dwellings.

Here too I have projected future population growth – and hence the need for new housing – over the same time period between the start of Covid 19 lockdowns and July 2022.  This estimation based on the fiscal 2022 increase, which is my estimate factoring in the recent lift in the overseas migration.

Also, the work in this post is based around dwelling approvals, not completions.

There is an expectation that most of the dwellings approved over recent years will actually get built.

Again, revisit last week’s post for my deliberations here.

One table and eight charts follow.


Since the start of Covid we have seen a large jump in the number of dwelling approvals across all eight Australian capitals.

Yet during this time – due to limited overseas migration and in some cases changes to internal migration patterns – the demand for new housing has actually fallen across many of our major urban areas.

Table 1 shows that overall, there is currently twelve (12) months potential oversupply of new dwellings across our eight capitals.

Melbourne, Sydney and Canberra have the highest potential oversupplies.

In contrast Darwin, Perth, Hobart and Brisbane have not approved enough new homes, whilst Adelaide is the ‘goldilocks’ of the bunch.

Charts 1 to 8 supply a trend line outlining the annual supply versus demand status for new housing over the past decade for each capital city.


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