The report provides analysis into housing demand and supply across Australia, as well as long-term projections, with a view to identifying potential drivers of, and challenges to, housing affordability.

The report predicts the demographic of home owners is expected to shift over the next decade, with increased supply the key to providing affordability for first home buyers. 

"More than 1.7 million new households are expected to form across Australia from 2022 to 2032," the report said.

"By household type, the strongest growth in new households is expected from lone person households (595,000), followed by couple families without children (488,000), then couple families with children (361,000).

According to the report, record low interest rates combined with government stimulus continues to impact positive construction activity. 

According to the report, new net housing supply additions are expected to outpace new household formation by 115,300 in 2022, and 35,500 in 2023, as international border restrictions are relaxed and Net Overseas Migration (NOM) begins to recover.

NHFIC expects more than 550,000 new completions by 2024, with detached dwellings leading the cycle. 

"Supply constraints, combined with strong demand for construction, has seen price growth for some materials (such as timber, aluminium and steel) soar by 2034% in 2021," the report said.

"Closed international borders have also led to labour shortages."

NHFIC data suggests it can take more than six years to get new housing supply to market. 

"If authorities actively slow or impede the flow of new housing supply, it can exacerbate upward pressure on rents and prices, something that should be avoided if improving housing affordability is a primary objective."

Housing affordability worsening

According to the report, housing affordability has worsened for renters and first home buyers. 

In Sydney and Hobart, less than 10% of properties are affordable for more than 60% of households. 

"Affordability challenges primarily burden prospective first home buyers, as increases in property prices make it more difficult to save for a deposit," the report said. 

"The average first home buyer now faces a $460,000 debt. A figure that has risen $50,000 in a year and has tripled since the early 2000s.

"The time it takes to save for a deposit has doubled since the early 1990's, from four to eight years."

The report also reinforced saving for a deposit is largely impacted by the high cost of renting and rents are likely to continue to rise in the near term as international border restrictions are relaxed.

"A shortage of multi-unit dwelling completions is expected in the next 2 to 3 years, especially as rental markets are already tightening, and demand will lift as international border restrictions are relaxed. More higher density dwellings will be required closer to CBDs to meet unmet demand."



Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
Featured Online ExclusiveUp To $4K Cashback
  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
5.99% p.a.
5.90% p.a.
Principal & Interest
Featured Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
Principal & Interest
Featured Unlimited Redraws
  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Image by Matt LaVasseur via Unsplash

Ready, Set, Buy!

Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!

With bonus Q&A sheet and Crossword!

By subscribing you agree to our privacy policy