This research examines the quantity, composition and distribution of new housing supply across Australia 2006–16 and seeks to explain variations in local rates of production with reference to demand-side considerations (e.g. population drivers, market cycles) and supply-side considerations (e.g. regulatory barriers, construction costs).

Key points:

• This study examines the quantity, composition and distribution of new housing supply across Australia 2006–2016, and seeks to explain variations in local rates of production. It builds on and extends earlier studies of housing supply in Australia by examining growth relative to base stock.
• The study finds that new housing supply is distributed unevenly between and within the Australian states. In cities such as Sydney and Melbourne, new supply has concentrated in high-value inner-city localities near transport and employment hubs (consistent with Ong, Dalton et al. 2017) but in all cities, significant amounts of new housing production are occurring in lower-value outer areas.
• Between 2006 and 2016 WA saw the greatest increase in the levels of dwelling stock (26 per cent) and NSW the least (just 12 per cent). Thirty-seven of the 489 local government areas (LGAs) analysed for this research increased stock levels by more than 50 per cent over 10 years, while 70 per cent increased stock by up to 25 per cent (on average around 2 per cent per annum).
• Across all states there has been a fall in the number of three-bedroom dwellings and a rise in the number of four- and five-bedroom+ dwellings. The number of three-bedroom dwellings fell from 47 per cent to 42 per cent of stock while the number of four-bedroom dwellings rose from 23 to 27 per cent.
• Ultimately housing supply is driven by market conditions and the ability of a developer to deliver an acceptable return. Variations in market conditions and the availability of quality development sites drive uneven patterns of supply.