Australia’s Housing Supply Crunch: What It Means for Buyers and How We Can Help

AAA Mortgages
Jul 31
3 min read

Australia’s housing market continues to be shaped by one powerful force: supply.

Navigating the Housing Supply Crunch: What Buyers Need to Know

The Australian housing market continues to be shaped by a major supply-demand imbalance. While headlines often focus on interest rates or auction clearance rates, the underlying issue of supply - or lack thereof - remains one of the biggest hurdles for home buyers today.

Housing Supply: The National Picture

Australia’s population is growing fast, fuelled by strong migration and natural increases. However, housing construction is failing to keep up. CoreLogic data reveals that national home values rose 8.3% over the 12 months to June 2024, with Sydney and Brisbane leading the gains. Meanwhile, the volume of new housing completions has been declining, with ABS figures showing just 166,000 dwellings were completed in the 2023 calendar year, well below what’s needed to meet demand.

Vacancy rates remain critically low across most capital cities, driving rental increases and putting further pressure on people to buy. In many regional areas, particularly across NSW, the squeeze is even tighter.

Rate Cuts Offer Some Relief, But Not a Solution

Recent interest rate decisions by the Reserve Bank of Australia have offered some welcome breathing room. After two rate cuts in early 2025, the cash rate now sits at 3.6%. This has brought some relief to borrowers, with average monthly repayments dropping modestly. Lower rates also improve borrowing capacity, but with limited stock on the market, many buyers are still struggling to secure a home.

Government Incentives Aim to Help

There are several government schemes available to support buyers, particularly first-home buyers and single parents.

These include:

First Home Guarantee (5% deposit with no LMI)
Family Home Guarantee (2% deposit for single parents)
Regional First Home Buyer Guarantee
Stamp duty concessions and First Home Owner Grants in various states

These schemes can provide a valuable boost, but navigating the eligibility requirements and securing funding can still be challenging without the right support.

Solutions for Buyers in a Tight Market

At AAA Mortgages, we understand how frustrating it can be to enter the market during a time of low supply and high competition. That’s why we work with a wide panel of lenders and offer tailored strategies to help you get your foot in the door.

Here’s how we can help:

Assessing borrowing capacity and helping you understand what’s realistic in today’s market
Exploring non-bank and specialist lenders who may offer more flexible criteria
Helping with guarantor and family pledge loans
Advising on deposit planning and genuine savings
Connecting you with trusted professionals including buyer’s agents, solicitors, and accountants

Want More Insight? Tune In to Our Upcoming Podcast

Stay tuned for our upcoming episode of the P.O.W.E.R. Podcast, featuring guest Kirsten Bradbury, Buyer’s Agent and Founder of Mayfield Property Buyers - it's dropping next month on Spotify and Apple Podcasts. We’ll be diving deeper into the current supply landscape, what buyers need to consider, and how expert support can make a real difference when competition is high and listings are low.

The Bottom Line

While the market remains tough, it’s not impossible - and with the right plan, the right team, and a bit of patience, your next property move could be closer than you think.

Whether you’re a first home buyer, upsizer, or investor, talk to the team at AAA Mortgages. We’re here to help you navigate the market and find the right lending solution, even in challenging times.

Book an appointment with us today, we’re here to help.