The Housing Industry Association of Australia’s principal economist, Tim Reardon, said in a report out on Monday the country needed to build over 230,000 homes/year to address its affordability challenge.
The report, Housing Australia’s future, presents scenarios based on population & wage growth to estimate the number of new homes required to avoid exacerbating the housing affordability challenge.
Mr Reardon said: “Over the past 15 years, Australia’s housing market has been dominated by a persistent undersupply of housing – the underlying cause of the rapid acceleration in prices and ultimately Australia’s housing affordability crisis.
“The excessive cost of supplying new housing lies at the core of the affordability challenge. This has been recognised by a number of key organisations, including the Reserve Bank of Australia & the Productivity Commission, and federal & state treasuries have identified the supply of housing as the key problem.
“In 2016, Australia built a record number of 230,000 new homes and we will need to maintain this rate of annual supply for the next 30 years if we are to meet future housing needs.
“The enormous pent-up demand for housing in metropolitan areas is now being met and, for the first time in 15 years, the supply of new housing is in balance with the demand for new housing.
“Housing affordability will not be solved by amending negative gearing, capital gains tax or imposing punitive charges on foreign investors. Such measures increase taxation on housing and further raise the cost of new supply, which is already excessive & inefficient.
“Meaningful action needs to include all 3 tiers of government, working with industry, to ensure the delivery of affordable residential housing.”
Attribution: Housing Industry Association release.