PROPERTY DEVELOPMENT

Australia Needs To Build 186,000 New Houses A Year Says HIA

November 14 2014

Australia Needs To Build 186,000 New Houses A Year Says HIA

A recent report by Housing Industry Australia has revealed that one of the largest policy challenges faced by the Australian property market in the coming decades is ensuring a sufficient supply of new dwellings to house our growing and ageing population.

The report considers future building requirements under different population and real income growth scenarios for Australia, as well as for each state and territory.

“The most likely outcome out of many scenarios is an annual new home building requirement between now and 2050, which is considerably higher than what has been achieved over the last 20 years”, says Geordan Murray, HIA economist.

“In a scenario where Australia’s population and its real incomes grow at a medium rate – a scenario we believe most plausible – the nation will need to build an average of around 186,000 dwellings per annum.”

What is required is a total of 152,000 homes that provide housing for new households and between 30,000 – 35,000 dwellings to offset the demolished homes to satisfy the demand for additional housing attributable to a rise in real household incomes.

“In 2013/14, the number of new homes built was about the same as the number of new homes demanded by the population during the year. Unfortunately a match of this kind is an aberration – throughout much of the last decade there was a considerable mismatch between the level of demand for housing and the amount of new home building,” Murray said.

“The challenge for governments is to ensure that policy settings will enable alignment of demand and supply to persist over the long term. This is a policy area deserving of prioritized and coordinated action from all levels of government.”

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