Australian Property News

Report shows housing supply at tipping point

Posted on Friday, December 23 2011 at 11:11 AM

There’s a widening gap between the demand for homes and the number being delivered, according to the Residential Development Council (RDC). Executive director Caryn Kakas says the Australian Government’s National Housing Supply Council – State of Supply Report 2011 confirms there’s a projected housing shortfall of 215,000 dwellings nationally.

“The report identifies major gaps between the demand for homes and the available supply with the disparity being particularly pronounced in New South Wales and Queensland,” she says.

“This is the result of a significant number of barriers impeding the housing market. These include record levels of development taxes and charges, inefficient planning systems and the failure of governments to deliver linking hard and soft infrastructure to new communities.

“The gap between supply and demand is projected to rise to 640,000 homes over the next 20 years. If we want to ensure this isn’t the future of housing in Australia, the tipping point for action is now. “

The RDC suggests those on low to moderate incomes be given more support and the planning system should be reformed.

However, property analyst Michael Matusik says those who wrote the report have a “vested interest”.

He told Property Observer there’d be no undersupply unless migration picks up.

“Australia’s population growth has slowed by close to 150,000 in just two years, with a 100,000 drop in the actual growth rate over the last 12 months. As a result, the underlying demand for new housing has dropped from 180,000 starts per annum to around 125,000. While dwelling starts are declining, we’re now building too much stock,” he told Property Observer.

“Unless new housing starts decline in earnest or population growth accelerates, Victoria, South Australia, Tasmania and the Northern Territory face an oversupply. Perth and Canberra are better positioned, with Queensland currently at equilibrium and New South Wales undersupplied.”