“HIA Predicts Housing Shortage Shortage To Quadruple”
Source: The Age
Date: Thursday, 18 March 2010
Author: Chris Zappone
“Australia’s shortage of available homes will more than quadruple to almost half a million by 2020 if the nation doesn’t increase the pace of construction, a new report claims. New South Wales and Queensland face the biggest problems.
The Housing Industry Association report comes one day after official statistics showed dwelling construction starts hit an eight-year high in the last quarter of 2009, offering a sign of hope for the nation’s housing crisis.
HIA, which represents the building industry, sees a need for 466,000 new homes to be built by 2020. The gap currently stands at 109,000 homes, the group said.
The strong economy has helped drive up house prices, with the increases exacerbated by lags in housing construction. The nation’s population is on track to swell to 36 million by 2050 from 22 million, potentially straining housing affordability even more.
“The reality in many regions and cities in Australia is that affordable, well-located land is not available or abundant,” said HIA senior economist Ben Phillips. “Planning restrictions, higher taxation on new housing relative to existing dwellings, labour shortages, and onerous regulation biased toward new housing all add to the problem.”
The practice of land banking by developers – or purchasing and holding land as a future investment while letting its value rise – has also been blamed for making housing less affordable.In Melbourne, for example, there are about 100,000 house lots zoned for home building, but only about 1400 of those lots will be put on the market this year.
The HIA report says shortages exist in 295 of Australia’s 669 local government areas.
“The majority of the shortages can be found in and around metropolitan Sydney and Brisbane.
“It was also found that many of the LGA’s with the largest housing shortage are also the same regions with the highest level of demand,” said Mr Phillips, with greater Sydney area and south-east Queensland key areas of interest for buyers.
One glimmer of hope for the problem is that dwelling starts jumped 15.1 per cent in December quarter to 40,022 units, rising from 11 per cent increase in September quarter, helped by low interest rates and the home buyer grant boost enacted last year.
Victoria narrows gap
Builders began work on more than 14,000 homes in Victoria in the fourth quarter, a pace, which if sustained, would begin to close the gap between supply and demand in the state.
Victoria is on track to be short more than 17,000 homes by 2020, the HIA said, increasing from a current deficit of 9800.
Rory Costelloe executive director at Melbourne-based developer Villawood Properties said Victoria was facing a ”short-term shortage” that should be relieved over the next two years.
”With the current precinct structure planning process, there will be a dramatic increase of supply not so much this year but next,” he said.
Victoria’s Growth Areas Authority is about to release more than a dozen new precinct plans, he said, each representing master plans for whole communities.
Mr Costelloe said the HIA numbers are an extrapolation of current trends.
Federal housing minister Tanya Plibersek acknowledges more housing supply is critical to affordability.
“We are working with the states and territories to increase supply and decrease the time taken to build new homes,” she said in a statement to BusinessDay.
“Work is progressing nationally to drive this agenda and we have funded new approval systems like Target Five Days which should ensure that up to 95 per cent of residential applications across nine south-east Queensland Councils are swiftly dealt with.”
The government has also announced a $500 million Housing Affordability Fund designed to lower the cost of new homes with 37 seven projects under way already across Australia.”