The skew of the new: lower priced housing left out of new housing supply

AHURI research finds 80% of approvals for new dwellings are for properties in the most expensive price deciles

Last updated 28 Aug 2017

AHURI research that examined housing supply responsiveness across Australia, reveals that approvals for lower priced houses were a small percentage of all building approvals in 2005–06 and again in 2013–14, with the vast majority of approvals (82.8% in 2013–14) in the 6th to 9th deciles (i.e. the measure of the distribution of house prices), a range covering houses prices of between $306,000 and $795,000.

Figure 1. Percentage of new house approvals by price decile

Source: AHURI Final Report No. 281

The approvals for new units was skewed even more to the most expensive properties with 80 per cent of unit approvals in the high 8th to 10th decile. Indeed, the supply of new units peaked in the 9th decile in 2013–14 (where the midpoint of the price range was $500,000) with almost one in three unit approvals being granted in this second highest price decile. In contrast, the bottom two price deciles, which represent the lowest priced market segments (price midpoints of $198,000 and $140,000 in 2013–14), accounted for less than 1 per cent of new unit approvals over the period 2005–06 to 2013–14.

Figure 2. Percentage of new unit approvals by price decile

Source: AHURI Final Report No. 281

The research report, Housing supply responsiveness in Australia: distribution, drivers and institutional settings, is available to download from the AHURI website.