A looming housing shortage is set to intensify competition in the Australian property market. The Business Council of Australia (BCA) has sounded the alarm, revealing that Australia is on track to fall significantly short of its housing targets. 

The BCA reports that while the government aimed to build 1.2 million new homes over the next five years – equivalent to nine homes per 1,000 people annually – the current rate is just six homes per 1,000 people.

This shortfall of three homes per 1,000 people annually translates to a significant gap in the availability of housing, putting upward pressure on prices and creating a more competitive environment for both buyers and sellers. 

What does this mean for you? 

Buyers: 

• Continued long-term growth in property: Increased competition will likely drive up property values. With fewer homes available and consistent demand, basic economics dictates that prices will rise. This means buyers may need to revise Act decisively: Properties will sell quickly, leaving little time for hesitation. In a market with limited supply, desirable properties will be snapped up quickly. Buyers need to be prepared to move fast and make offers promptly to avoid missing out. 
• Be realistic when making offers: Be ready to offer above asking price or make compromises on conditions. Competition for desirable properties may lead to strong competition above the asking price to secure the home. Buyers may also need to be prepared to waive conditions or make other concessions to make their offer more attractive. 
• Widen your search: Finding the perfect property may require more flexibility and a broader search area. With fewer options available, buyers may need to be more open-minded about location, property type, and features. Expanding your search area can increase your chances of finding a suitable home. 

Sellers: 

• Capitalise on high demand: Expect strong offers and potentially multiple bids. Sellers are in a strong position in a housing shortage. They can expect to receive competitive offers and potentially multiple bids on their property, allowing them to achieve a favourable sale price. 
• Prepare for a fast-paced sale: Well-priced homes could sell quickly in this competitive market. The high demand for housing means that well-priced and well-presented homes can sell very quickly. Sellers should be prepared for a potentially fast-paced sales process and ensure their property is ready for viewings. 
• Ensure the property is well presented: Although property is in demand, buyers still want to enjoy the property from day 1 so properties that are well maintained and presented will alway attract the strongest interest. Likewise, investors are able to quickly materialise a return from a property if it’s ready to rent from settlement.

The challenges of a housing shortage are wide reaching and extend way beyond demand for home which is why it is critical to have all levels of Government engaged in practical conversations on how we can address this pressing issue.

Properties need to be developed in areas which offer infrastructure and facilities and diversity in housing is also critical to ensure that all demographics are catered for. 

Whilst the current situation is a genuine hurdle for many individuals, if meaningful solutions can be devised and implemented, it may put Australia in a strong position to attract further investment, both locally and from overseas.

A healthy economy has many elements to it and certainly housing is a cornerstone of this.

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