Australian Property News
Affordability will worsen as supply falls short
Posted on Thursday, December 17 2009 at 7:50 AM
Housing supply in Australia will fall short of the projected population boom, according to a Queensland property industry professional.
Bill Morris, author of the Midwood Queensland Investment Report, says housing will become even less affordable as prices skyrocket under the pressure of unsatisfied demand.
Research recently released by Federal Government Treasury Secretary Ken Henry predicts that Australia's population will grow by 325,000 people a year until 2049 – that’s 50 per cent faster than historical growth rates.
"It's likely that Treasury's population projections are unsustainable because of underlying housing supply issues," Morris says.
"The major component of Australia's population increase is forecast to be in overseas migration, which totalled 285,347 in the year to June 2009."
"Eleven years ago, there were only 98,538 overseas immigrants."
"This is a phenomenal rise of 10.2 per cent per annum, without the equivalent increase in housing commencements."
In the year to June 2009 housing commencements in Australia totalled 131,500 and population growth was 443,100 people.
According to Morris the level of commencements only satisfied demand of 313,000 people, with around 2.38 people per household. That means Australia really needed to build 186,000 new homes, or 55,000 more than it actually built.
At the 2006 Census rate of 2.38 people per home, an extra 440,000 people will require 185,000 new dwellings annually. But the Housing Industry Association recently estimated that only 142,000 homes will be built by mid-2010 rising to 166,000 in mid 2012.
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