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Housing affordability depends on new homes, says HIH

Property Markets / Outlook

Australia

Apr 15 2018

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Housing affordability will get worse without new homes being built at record levels, annually for the next 30 years, according to new research by the Housing Industry Association. 

The prediction is based on population and economic growth remaining stable, however the number of houses required would increase should wage growth increase. 

HIA principal economist Tim Reardon said Australia would need to build more than 230,000 homes — the record level achieved in 2016 — each year for 30 years, a significant increase on the 175,000 homes built annually since 2000. 

“Over the past 15 years Australia’s housing market has been dominated by a persistent undersupply of housing, which has been the underlying cause of rapid acceleration in prices and ultimately Australia’s housing affordability crisis,’’ Mr Reardon told The Australian.

“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.”

Photo: HIH

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