The latest UDIA Housing Index data for the June quarter confirms that supply continues to lag badly behind demand for both sale and rental homes, driving prices ever higher and making the dream of homeownership increasingly out of reach.
“The UDIA Housing Index (UHI) figures show that across Australia, demand for housing increased over the three months since the last UHI report. Demand now sits at record highs, while housing supply remains at near a decade low with all jurisdictions recording either decreased supply or only marginal improvements,” said Col Dutton, UDIA National President.
The UHI Supply Sub-Index for the June Quarter recorded the national housing market in a ‘weak performance band’ of 88 index points which is alarmingly low and 12% lower than the long run average. To put this into context the March and June 2024 quarter index readings are the lowest on series record.
The forward supply pipeline is increasingly challenged by ongoing cost and capacity pressures impacting the new build residential sector with flow-on impacts continuing to place significant pressure on the rental market. As a result, there is limited expectation of a marked improvement in the performance of the UHI Supply Sub-Index over the coming two quarters.
The further increase in housing demand shown in the UHI Demand Sub-Index in June is primarily attributable to an uptick in owner occupier mortgage lending and the ongoing elevation in population growth rates.
“The UDIA Housing Index shows that extremely challenging housing market conditions underscore the need for governments across the nation to work with the residential development sector on solutions to unlock new dwelling supply faster and boost new housing capacity,” said Col Dutton.
Key Stats:
- The ongoing weakness in the UHI Supply Sub-Index is being driven by near record low dwelling approvals and commencements which are both 20% lower than the long run average (on indexed terms) and showing little sign of turning around anytime soon.
- The ongoing paucity of national rental listings (which are also down at near record low levels) is also having a demonstrable negative impact on the overarching UHI Supply Sub-Index.
- The UHI Costs Sub-Index recorded a fourth consecutive quarter of negligible change reflecting that housing construction input costs appear to have peaked and owner occupier lending rates have remained static since the RBA last raised the cash rate in November 2023.
- Despite being weighed down with supply side weakness, Western Australia once again recorded the strongest performing housing market in the nation for the quarter (due to an aggregate demand profile 54% higher than the national average) followed by Queensland and South Australia.
- The smaller housing markets of Tasmania, the Australian Capital Territory and the Northern Territory all recorded lower than average population growth fuelled demand, which together with weak supply resulted in these markets performing well below the national average.
The full UDIA Housing Index Report for the June Quarter can be found at this link