Housing supply well short of demand

Housing supply fell 16% below demand over the 2009 financial year, a Residential Development Council of Australia report has found.

According to the council, Australia’s residential property developers will need to build 155,000 homes annually in the next five years to cater for the additional 1.6 million people that are expected to take up residency in Australia.

The forecasts show that, while there are 21.5 million people living in Australia, the number will leap by 330,000 people annually for the next five years to 23.1 million, with 28 million residents in 20 years.

Other findings show seven out of 10 people currently live in and immediately around the capital cities. But despite the need for extra dwellings, developers have halted projects and some are selling land sites at severely discounted prices amid the downturn, despite lower interest rates making housing more affordable.