ABC News: John Gunn
The article suggests several positive impacts for the construction sector:
- The commentary by economist Saul Eslake notes that if investors shift their focus from buying existing dwellings to building or purchasing new properties, this would contribute to increasing the housing supply — which implies more new construction activity.
- Because rental demand surged (as described by Tim Lawless: “A surge in rental demand, initially from smaller households and later amplified by reopened borders, ran head-long into a supply shock…”) this strong demand sets the stage for heightened building activity, as more supply would be needed to meet that demand.
- The article points out that current tax concessions could be redirected to favour investors who build new dwellings rather than purchasing existing ones, which again has the potential to stimulate construction of new homes
Tim Lawless:
“A surge in rental demand, initially from smaller households and later amplified by reopened borders, ran head-long into a supply shock…”
The combined effect is two-fold: in the rental market, vacancy rates remain extremely low and landlords are in a position to push rents higher; in the housing and construction market, because more investment is directed toward existing properties instead of new builds, the growth of new housing supply lags behind demand. This means the building sector has less impetus to construct new dwellings, and the overall housing shortage remains a pressing issue
Tim Lawless:
“A surge in rental demand, initially from smaller households and later amplified by reopened borders, ran head-long into a supply shock…”
The combined effect is two-fold: in the rental market, vacancy rates remain extremely low and landlords are in a position to push rents higher; in the housing and construction market, because more investment is directed toward existing properties instead of new builds, the growth of new housing supply lags behind demand. This means the building sector has less impetus to construct new dwellings, and the overall housing shortage remains a pressing issue.
Read the full: https://www.abc.net.au/news/2025-11-16/property-investors-boosting-supply-of-rentals-or-dwellings/106012670