Housing affordability – What’s the plan

“Australia needs to build in more than 230,000 homes every year if we are to address our current housing affordability challenge,” stated Tim Reardon, HIA’s Principal Economist.

HIA has released a Report, “Housing Australia’s Future”, which presents a number of scenarios based on future population growth and wages growth to estimate the number of new homes required avoid exacerbating the housing affordability challenge.

“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 RBA and the Productivity Commission; and federal and state Treasury’s 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 thirty 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 and inefficient.

“Meaningful action needs to include all three tiers of government, working with industry, to ensure the delivery of affordable residential housing,” concluded Mr Reardon.

Source: HIA

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