Housing Affordability Drops as Victorian Population Grows

UDIA’s most recent Residential Development Index has revealed that the Victorian housing market is currently operating at an index of 112.0 and demonstrating historically high levels of activity across all sectors. However, despite these positive results, there is much uncertainty surrounding the future of Victoria’s residential development industry.

Melbourne’s seven-year reign as the world’s most liveable city has created a significant population boom. According to data sourced from the 2016 Census, almost 2,000 people are arriving in Melbourne every single week. The city is quickly outnumbering Sydney and is tipped to soon become Australia’s most populous city.

This dramatic increase in population will bring new concerns to Victorian home buyers and renters. The RDI revealed that Victoria is set to face a significant housing demand/supply gap within the immediate future. Demand is expected to outnumber supply by over 4,000 dwellings, making the future of housing affordability look very grim.

We are already beginning to see the effects of this. There has been a substantial increase in group households and Victorian renters are paying about $780 more on rent per year when compared to the national average.