Is a housing crisis a new city opportunity?

Population growth speeds up

Australia’s latest population growth revealed an increase of over 560,000 people in a 12 month period, to March 2023, according to the Australian Bureau of Statistics. The increase was mostly through net overseas migration of 454,400 people and natural increase of 108,800. Growth was at an annual rate of 2.2% nationally with Western Australia leading the states and territories with the fastest growth at 2.8%. Victoria had the largest growth increasing by 161,700 people, returning to its standard position as the nation’s largest growing state before the impact of COVID on population shifts.

Top three fastest growth states/territories

• WA at 2.8%
• Vic at 2.4%
• QLD at 2.3%

Top three largest growth states/territories

• Vic at 161,700 people
• NSW at 156,300 people
• QLD at 124,200 people.

Queensland remains desirable across the borders

Queensland still leads the nation with triple green lights of population growth: growing through means of natural increase, net internal migration and net overseas migration. Queensland offers affordability, liveability and employability as it prepares for it’s decade in the global spotlight with the 2032 Olympics.

Components of annual population growth

The future is coming at us faster than expected, again!

In the latest Intergenerational Report [1], the forecast is for an average population growth of 1.1%, compared to the current rate which is double that at 2.2%. Even the more recent decade average of 1.4% annual population growth will see Australia reach 40 million people faster than the IGR expects in 2062. Faster than expected growth means we are more likely to see the population reach 40 million in 2050, more than a decade ahead of schedule.

Faster than expected population growth creates an issue of housing supply and demand. Although a challenge, it also provides an opportunity for bold thinking, long-term strategic thinking and visionary perspectives of what Australia could look like as we approach 40 million people by 2050. To house the additional 13.5 million people from mid-2023 in the 27 years ahead, Australia will need to build 5.4 million dwellings for people to call home.

Housing is a crisis, and an opportunity

The Housing Australia Future Fund, according to Treasury, is aiming to supply 1 million new homes over the 5 years from mid-2024. Shockingly, however based on current annual growth of over 500,000+ people per year, the new 2.5 million residents (both natural increase and net overseas migration) will simply absorb the 1 million homes based on the average people per dwelling of 2.5 in the 2021 ABS Census, doing nothing to reduce the shortage of housing overall. Once again, population growth is occurring faster than anticipated and infrastructure supply is very unlikely to keep up with demand let alone reduce the supply pressure with demand rising rapidly.

Building 1 million homes in the near term is crucial and suitable in light of immediate supply issues, however the development of liveable cities for these is key to future liveability, affordability and connectivity in Australia.

The new city opportunity

Population growth in existing or even in new cities requires necessary infrastructure in cities beyond simply housing as well as inter-city connectivity.

We have an opportunity to explore new cities and seize the moment of people’s desire for urban lifestyles yet regional amenity benefits that have taken centre stage in recent years as the rise of the regions has occurred. CLARA’s plan is to build regional regional cities of 500,000 people in up to 200,000 new dwellings connected through high-speed rail (HSR) between Melbourne and Sydney via Canberra. The power of this vision is that new housing in CLARA smart cities [2] is supported with key infrastructure such as innovative transport methods, intercity HSR transport methods, digital connectivity, health services for a multi-generational population, education for lifelong learning, recreation for health and community benefits as well as social infrastructure, access to amenity such as green and blue spaces for mental health and wellbeing into the future.

Is this ‘the crisis we had to have’?

But even CLARA’s plan of 8 new cities between Melbourne and Sydney will only accommodate 4 million of an expected 13.5 million people by 2050, if such a plan was enacted and approval barriers were unlocked. Australia’s housing crisis might just be the ‘crisis we had to have’ to create new cities and expand our horizon of thinking and the scope of our solutions to the ‘housing crisis’. This might set the course of a new strategy for housing Australia’s growing population that is disruptive in a good way if we can see the opportunity for innovation amidst the crisis. Emerging generations will benefit from today’s planning for posterity, legacy and liveability, such as Generation Alpha, those born since 2010, who are expected to have to pay $4 million for a median house price in 2040 based on current projections of when they will buy and how much property in Sydney will cost. Today’s leaders need to futureproof our society, our cities and our lifestyle with bold moves that create positive change for generations to come.

[1] https://treasury.gov.au/sites/default/files/2023-08/p2023-435150-fs.pdf

[2] https://www.clara.com.au/smart-cities/a-clara-smart-city/