Australia’s ongoing shortfall in new housing supply is carving a tougher landscape for both borrowers and those working to secure their loans. For mortgage brokers, the current climate brings a mix of unique pressures and potential, shaped by deep-seated supply constraints, robust demand, and a shifting mood among buyers.
Structural Barriers and Persistent Undersupply
New home construction across Australia has not kept pace with population growth. In the 2024 financial year, the country produced 62,000 fewer homes than required to accommodate additional residents. Major urban centers such as Sydney, Melbourne, and Perth have suffered pronounced shortages. For context, Western Australia met less than half of its housing need—a gap reflected in sharp property price rises. Even as population growth has slowed somewhat, dwelling approvals remain very subdued, and supply constraints are expected to persist well into the next decade.
Several factors feed this chronic under-delivery:
- Ongoing labour and material shortages in the construction industry
- High regulatory costs and protracted approval timelines
- Increased costs for land, development, and lending
Forecasts suggest the country will fall hundreds of thousands of homes short of national targets through 2029. Government and industry reforms are underway, but the pace of change is unlikely to bridge the demand-supply gap soon.
Consequences for Borrowers and Brokers
Demand remains elevated, yet affordability is eroding. Rents and property prices have surged to record highs, outpacing income growth since the pandemic. For many households, the combination of high rents, rising living costs, and tight housing stock makes saving for a home deposit difficult and lengthens the path to ownership. Servicing a new mortgage now absorbs around half of a median household’s income—a figure far above standard stress thresholds.
Broader client needs—and risks—are emerging:
- First-home buyers require more guidance on alternative strategies, such as shared equity or guarantor loans.
- Those building new homes face longer lead times and higher upfront expenses, including regulatory costs and taxes, which can affect loan structuring and settlement timelines.
- Loan applications are harder to push through in a climate of limited listing stock and competitive bidding, with buyers often stretching to meet price expectations.
At the same time, the lack of available housing means brokers face a higher administrative load as applications require creative structuring, deeper policy knowledge, and ongoing communication with both lenders and clients. The upward trend in property values also puts additional focus on risk management and borrower serviceability.
Where Opportunities Remain
- Ongoing demand underpins mortgage activity: Even amid tight conditions, robust migration and persistent national housing demand help keep the volume of clients seeking loans strong.
- Refinancing and restructuring: As buyers stretch financially, brokers can differentiate by advising on refinancing, debt consolidation, and longer-term strategies, especially for those looking to upgrade or compete in a dynamic market.
- Increased need for specialist advice: Complex lending scenarios—blended families, single buyers, upsizers, investors—are more common as traditional entry points remain out of reach for many. Brokers equipped to handle nuanced applications are well placed to add value.
Signs of Mood Shift
For decades, home ownership formed a central pillar of the Australian notion of prosperity. Today, a growing sense of disenchantment is evident, as affordability slips away from many, and perceptions of the country as the land of opportunity are less assured than in the past. These socio-economic pressures highlight the importance—and challenge—of the broker’s role in guiding clients through an increasingly complex and competitive market.
Mortgage brokers are operating at the frontline of a national transition in housing access and finance. The conditions demand agility, innovation, and deep policy literacy, with a premium placed on strategic client relationships. The profession’s influence is growing, even as the environment in which it operates becomes less forgiving and more reliant on problem-solving than ever before.
