Australia's housing supply could be short by half a million homes within ten years.
Changing this requires reform to reduce the tax burden on new housing, speed up land release, and improve the approvals processes.
The Housing Industry Association (HIA), the voice of Australia’s residential building industry, has just release a report showing a critical shortage of new homes building over the next decade unless action is taken.
The HIA - JELD-WEN Housing to 2020 Report provides projections of the underlying demographic demand for housing and the number of dwellings to be completed over the next nine years at national, state and local government levels.
Announcing the release, HIA Senior Economist, Andrew Harvey noted that the report's projections highlight just how large the aggregate housing supply challenge facing Australia has become.
"HIA estimates that Australia will require in the order of 1.6 million homes over the nine years to 2020, but if we build at the average rate of the last 20 years many areas of the country will have a critical housing shortage by 2020.
"Under such a scenario the cumulative national shortage could approach 500,900 dwellings.
"Clearly that situation can't be allowed to happen and it doesn't have to happen.
"Substantial policy reform is required, and can be achieved, to ensure Australia begins reducing its shortage of dwellings, rather than accumulating a larger one."
State-by-State Analysis
The greatest housing supply challenge is in New South Wales, which could reach a dwelling shortage of 155,700 dwellings by 2020.
Under the same scenario, the projected dwelling shortages at 2020 in the other states and territories are:
- 104,200 dwellings in Victoria;
- 112,000 dwellings in Western Australia;
- 91,800 dwellings in Queensland;
- 24,600 dwellings in South Australia;
- 12,500 dwellings in the Northern Territory; and
- 1,400 dwellings in the ACT.
What needs to be done
To reverse the existing housing shortage as well as meet annual demand from now until 2020 would require an annual build rate in excess of 204,000 dwellings.
HIA believes that we cannot achieve even close to annual home building levels of this level.
However, they do feel that the country can and must do much better than the 148,800 new dwelling average of the past twenty years, and indeed the sub-140,000 dwellings HIA estimates were completed in 2010-11.
Andrew Harvey is clear on what needs to be done:
"Improving Australia’s housing supply requires serious reform to reduce the substantial tax burden on new housing, speed up land release, and improve zoning, planning and approvals processes.
Without this reform the challenge of overcoming the housing shortage, and the subsequent avoidable pressure on prices and rents, will only intensify." Call us on 1300 55 10 45 or see our website.
Posts
