Housing shortage bites

June 30, 2008, 7:23pm,  176 views

The Housing Industry Association says a million new homes are needed to house Australia’s growing population.

HIA’s chief executive (policy) Chris Lamont says the challenge of building almost one million new homes in just five years is a daunting one but essential if demand for owner occupied, rental, community and social housing is to be met.

“Demand for housing is being driven primarily by two key factors: very strong immigration and the decline in the number of persons per residential dwelling,” he said.

“Record migration and demand for housing is being seen in a number of areas, but is perhaps most significant in respect to the private rental market where vacancy rates are hovering around one percent.

“Demand for housing is really biting as evidenced by record low vacancy rates in the private rental market.”

HIA research confirms that in 2008-09 some 190,000 new dwellings are required, this is 40,000 more dwellings than expected production.

“Australia’s population is growing at historically high levels,” Mr Lamont said.

“Resident population grew by 332,000 or 1.6 percent in 2007. Much of this increase (184,000) was due to growth in net overseas migration. The growth in net permanent migration is expected to increase by a further 37,500 in 2008-09.

“Supply must increase rapidly to meet expected demand, particularly in Australia’s capital cities.

“Without a substantial increase in production there will almost certainly be a growth in the number of homeless and further affordability woes.”

Comment: Good news for existing home owners, builders and tradesmen. Bad news for renters.

Lamont touched briefly on the issue of changing lifestyle trends. There are retired people and couples living in four-bedroom houses. Whereas 3BR homes were the norm for builders in the 80s they are pretty much unloved these days.

It’s a thought-provoking statement by the HIA. Sadly I don’t think any government has the necessary energy or vision to come up with a quick remedy.

More land releases, abolition of stamp duty and the construction of new towns should be in the mix for urgent implementation.