Australian Property News
Dwelling quality takes priority over quantity
Posted on Wednesday, March 10 2010 at 4:24 PM
Australians are choosing quality over quantity when it comes to the construction of new houses, Reserve Bank of Australia (RBA) assistant governor Philip Lowe says.
In an address to the Urban Development Institute of Australia's National Congress, Lowe said that in recent years, "the rate of increase in the number of dwellings has been below the average of the past 50 years", while population growth has been around its fastest rate in 50 years.
However, Lowe notes the relatively slow growth in the number of dwellings being built isn’t reflected in the amount of money going into dwelling construction.
"In fact, the share of GDP (gross domestic product) devoted to the construction of dwellings over recent years is above the average of the past five decades," he says.
"However, within total dwelling investment, renovation activity now accounts for a higher share than was the case historically, and the average size and quality of new dwellings has also increased substantially."
"The result of these developments is that for a given share of GDP devoted to housing investment, there's a smaller increase in the number of dwellings than was the case previously."
"In a sense, as a society there has been a trade-off between quality and quantity; in particular, we have implicitly chosen to build bigger and better-appointed dwellings, rather than more dwellings."
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