AUSTRALIA’S housing crisis is being fuelled by a simple but growing imbalance: more people are arriving than homes are being built.
New population data released by the Australian Bureau of Statistics shows Australia’s population grew by 412,500 people during the 2025 calendar year, including 301,000 through net overseas migration.
However, according to the Housing Industry Association (HIA), fewer than 200,000 homes started construction during the same period – well short of the more than 250,000 homes needed to meet demand and begin reducing the existing housing shortage.
HIA Chief Economist Tim Reardon said the nation was effectively trying to fit 11 million households into just 10 million homes.
“Australia needed to build more than 250,000 homes last year just to keep pace with demand growth and begin reducing the housing shortage, and yet we commenced less than 200,000 homes,” Mr Reardon said.
“This is why home prices and rents are rising.”
The warning comes as housing affordability remains one of the nation’s most pressing economic and social challenges, with rising rents, house prices and a shortage of rental properties continues to increase pressure.
Mr Reardon said many policymakers incorrectly calculate housing demand by simply dividing population growth by average household size.
“Households seek more housing space, occupancy rates decline, household formation increases and demand for second homes rises.”
Even without population growth, HIA estimates Australia would still require more than 100,000 new homes annually due to factors such as household formation and changing living arrangements.
The association argues migration should not be viewed as the sole cause of housing demand, noting that a growing economy also generates additional demand.
