4102.0 - Australian Social Trends, 2005  
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Contents >> Housing >> Supply of housing

Housing Stock: Supply of Housing

Between 1991-92 and 2003-04, construction was completed on 145,000 new dwellings on average per year.

Housing provides shelter, safety and stability for individuals and families. In addition home ownership can provide financial benefits as it represents the accumulation of an asset. Traditionally, Australians have enjoyed high standards of housing, underpinned by growth on average per year. in the supply of housing which has kept pace with population growth. However, several issues arise from population growth which impact on the supply of housing. These include city expansion, the limited availability of land for new developments, urban sprawl, increased population density and household size. All of these impact on the location and structure of new residential dwelling constructions. Changes in housing supply can affect housing affordability.(endnote 1) (endnote 2) This article explores changes in Australia's housing supply, specifically the location and structure of dwellings since the early 1990s, by examining new residential construction.


Most Australians live in separate houses on their own block of land. In 2001, 76% of private dwellings in Australia were separate houses, down slightly from 78% in 1991. The proportion of higher density housing increased from 20% to 22% with the proportion of other dwellings remaining at around 2% over the period.

The total number of occupied private dwellings increased by 21%, or 1.2 million dwellings, over the decade to 2001. But at the same time, Australia's total population only increased by 12%, resulting in an overall decline in the average size of households (the number of people living in a dwelling). Between 1991 and 2001, the average household size declined from 2.7 to 2.6 persons. For further information, see Australian Social Trends 2003, Changes in Australian Housing.


This article examines the supply of new residential housing in Australia using data on new residential construction from the ABS quarterly Building Activity Survey.

Most Australians reside in a self-contained dwelling unit , consisting of a suite of rooms including cooking and bathing facilities, and intended for long term residential use. Units (whether self-contained or not) within buildings that offer institutional care (such as hospitals) or temporary accommodation (such as motels, hostels and holiday apartments) are not defined as dwelling units

Dwelling units include separate houses , which are detached from surrounding buildings, and higher density housing , including semidetached houses, terrace houses, townhouses, flats, units etc. For higher density housing, the number of individual dwelling units are presented, rather than the number of buildings.


Increase in number of dwellings 1991-2001
Annual average change 1991-2001

Dwelling structure

Separate houses
Higher density housing


Average household size
. .
. .

(a) Dwellings where the dwelling structure was not stated were excluded prior to the calculation of percentages.
(b) Includes caravans, cabins and houseboats; improvised homes, tents and sleepers out; and houses and flats attached to a shop, office, etc. See also
Counting the Homeless, 2001 (ABS cat. no. 2050.0).

Source: ABS 1991 and 2001 Censuses of Population and Housing; Household Estimates, Australia , 1986 and 1991-1994 (ABS cat. no. 3229.0); Australian Demographic Statistics, September 2004 (ABS cat. no. 3101.0).


In large towns and cities, new housing is provided both through the development of new land on the urban fringe, as well as the redevelopment of land within existing urban boundaries. However, new dwelling commencements may take over a year before the completed dwelling is available on the housing market. 3 The housing supply is also affected by government land release and development policies. Recently, some parts of the housing industry have expressed concerns that not enough land is being made available for residential development, particularly in the larger cities such as Melbourne and Sydney (endnote 1).

Between 1991-92 and 2003-04, new dwelling commencements and completions tracked each other reasonably steadily (commencements leading completions) except for a short period around the introduction of the GST in July 2000.

Since 1969-70, there have been numerous peaks and troughs in the number of new dwelling commencements and completions in any one year. Nevertheless, over the past three decades the annual number of completions has always been between 115,700 (1982-83) and 170,200 (1994-95) and the underlying trend has been fairly flat.

Between 1991-92 and 2003-04, almost 2 million new residential dwellings were completed, an average of approximately 145,000 per year. The highest number of completions occurred in 1994-95 (170,200). The number of completions was lowest in 1996-97 (119,400 dwellings), representing a decrease of 30% from the peak two years earlier.

In general, the pattern of housing completions over the last decade in each state and territory reflects the relative share of population growth over the same period. States with the highest population growth recorded the highest number of completions, including an average of 43,000 per year in New South Wales and 36,100 in Queensland. NSW accounted for 29% of population growth over the period and 30% of housing completions, while Queensland accounted for 33% of population growth and 25% of completions. In recent years the average household size in Queensland has declined in comparison to the rest of Australia.

Dwelling commencements and completions

Statistics from the ABS quarterly Building Activity Survey were compiled from surveys completed by builders and other individuals and organisations engaged in building activity. The survey includes private sector residential building jobs valued at $10,000 or more and all public sector residential building jobs.

A residential building is a building predominantly consisting of one or more dwelling units. Dwelling units are either separate houses or higher density residences such as apartments and flats.
The ownership of a building is classified as either public sector or private sector , according to the sector of the intended owner of the completed building.

A commencement occurs when the first physical building activity has been performed on a building site in the form of materials fixed in place and/or labour expended, including site preparation. For further information, see Building Activity, Australia, ABS cat. no. 8752.0.

A completion occurs when building activity has progressed to the stage where the building can fulfil its intended function. For more information, see Building Activity, Australia (ABS cat. no. 8752.0).

It should be noted that a dwelling commencement and completion does not necessarily represent a net addition to Australia's total housing stock, as existing dwellings may have been demolished to make way for new construction or for other reasons.

New dwelling commencements and completions
Graph: New dwelling commencements and completions

    ...separate houses

    Traditionally, Australian housing has mainly consisted of a separate house on its own block of land. Separate houses remain the majority of new dwellings constructed, at over two thirds (72%) of new dwellings completed since 1991-92. This proportion declined from a high of 75% in 1991-1992 to a low of 69% in 2000-01.

    While separate houses were the most common form of dwelling completions in all states and territories, the proportion varied widely. The highest proportions between 1991-92 and 2003-04 were in South Australia (84% of all completions), followed by Victoria and Tasmania (both 81%), and Western Australia (80%). The lowest proportions of separate house completions between 1991-92 and 2003-04 were in ACT and New South Wales (58% and 59% respectively).

    Although the average size of the block of land on which separate houses are built has been declining, the floor size of houses has been increasing. Between 1993-94 and 2002-03, the average floor size of new houses built in capital cities increased from 196m2 to 235m2.

    Between 1991-92 and 2003-04 the average purchase price of a new separate home, including land, increased by 55%. Over the same period, the cost of building materials for houses increased by around one-third (30%) (for further information see Australian Social Trends 2005 , Housing summary tables).

    Separate houses and higher density housing as proportion of total completions, states and territories - 1991-92 to 2003-04
    Graph: Separate houses and higher density housing as proportion of total completions, states and territories - 1991-92 to 2003-04

    ...higher density housing

    Higher density housing is often seen as a solution to the environmental and social problems caused by 'urban sprawl' in Australia's larger cities. It is also seen as improving housing affordability (endnote 4).

    Higher density dwellings made up around 28% of new dwelling completions between 1991-92 and 2003-04. This proportion increased from a low of 25% in 1991-92 to a high of 31% in 2000-01. In 2001 higher density dwellings made up 22% of the total housing stock, up from 20% in 1991. The highest number of higher density dwelling units (48,200) were completed in 1994-95.

    Completions of higher density housing between 1991-92 and 2003-04 were most common in the ACT (42% of all completions) and New South Wales (41%), followed by the Northern Territory (36%).

    A small proportion (13% at 2001 Census) of higher density housing (town houses and apartments) are high rise apartments, which are defined as four stories or more (see Australian Social Trends 2004, High-rise living).


    Information on housing construction can be broken down geographically into capital city areas and the balance of the state or territory. Capital cities are referred to here in the wider sense, and include the area city planners expect to be incorporated into the city over the next 15-20 years. For example, Sydney in this sense includes areas such as Katoomba and Gosford, while Melbourne includes Werribee and the Mornington Peninsula.

    As our capital cities expand, there may be a need for new planning measures to enhance liveability and environmental sustainability, as well as to make efficient use of the limited land which is available for further development. (endnote 5) (endnote 6). Housing affordability is also an issue in capital cities, particularly Sydney (endnote 7).

    Across Australia, 62% of housing completions between 1991-92 and 2003-04 were located in capital city areas. This proportion increased from 57% in 1993-94 to a peak of 69% in 2000-01, before dipping to 63% in 2003-04.

    Excluding the ACT, where almost all residential development is within Canberra, the states with the highest proportion of housing completions located in their capital city between 1991-92 and 2003-04 were Western Australia and Victoria, with 73% of completions located in Perth and Melbourne. The only states where less than half of completions were located in the capital city were Queensland (44% in Brisbane) and Tasmania (41% in Hobart).

    A greater proportion of higher density dwellings (such as flats and townhouses) than separate houses are constructed in capital cities, reflecting the greater density of urban development in large cities. Between 1991-02 and 2003-04, 57% of separate house completions were located in capital cities, compared to 73% of higher density completions.


    The vast majority of housing construction in Australia is undertaken for the private sector, averaging 96% since 1991-92. There has been a steady decline in the proportion of housing and construction undertaken for the public sector since the early 1990s. The proportion of direct public sector construction was at its highest (at 7%) in 1991-92, but fell to 2% by 2002-03. At the same time, there has been an increase in government housing assistance provided through schemes such as Commonwealth Rent Assistance. It should be borne in mind that state and territory housing authorities also add to public housing stock by purchasing dwellings not initially constructed for public housing and by leasing dwellings from the private sector.

    A greater proportion of dwellings constructed for the public sector were higher density dwellings compared with dwelling construction for the private sector. Between 1991-92 and 2003-04, 61% of public sector dwelling completions were for higher density dwelling units, compared to 27% in the private sector.


    1 Productivity Commission 2004, First home ownership , Report no. 28, Melbourne.

    2 National summit on housing affordability 2004,< http://www.housingsummit.org.au >, accessed 1 October 2004.

    3 Australian Bureau of Statistics 2004, 'Work in the Pipeline', in Construction Work Done, Australia, Preliminary, June quarter 2004 , cat. no. 8755.0, ABS, Canberra.

    4 Yates, J 2001, 'The rhetoric and reality of housing choice: The role of urban consolidation', Urban Policy and Research , vol. 19, no. 44, pp. 491-527.

    5 Searle, G 2004, 'The limits to urban consolidation', Australian Planner , vol. 41, no. 1, pp. 42-48.

    6 Newton, P 2002, 'Urban Australia 2001; Review and prospect', Australian Planner , vol. 39, no. 1, pp. 37-45.

    7 Randolph, B, Holloway, D 2002, 'The anatomy of housing stress in Sydney', Urban Policy and Research , vol. 20, no.4, pp. 329-355.

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