REAL STATE - Home Building Falls Behind Population Growth

The Housing Industry Association (HIA) estimates that Australia needed to build more than 250,000 homes last year just to keep pace with demand growth and begin reducing the housing shortage. Instead, we commenced construction of just 196,000 homes. That gap is why housing affordability continues to deteriorate," stated Tim Reardon, HIA's Chief Economist.

"Every time population data is released, commentators misrepresent the scale of the housing problem.

“They simply divide population growth by average household size of 2.5 and conclude Australia only needs to build 170,000 homes per year. This obtuse approach grossly underestimates the demand for homes and perpetuates a misunderstanding of the nature and depth of Australia's housing shortage.

“Alongside the persistent myth that Australia has one million vacant homes, the claim that we are building enough housing continues to be repeated despite clear evidence to the contrary.

The National Housing Supply and Affordability Council (NHSAC) forecasts that Australia will continue to under-supply housing through to at least 2030.

"Migration contributes to housing demand, but so do population ageing, household formation, relationship breakdowns, changing housing preferences and replacement demand,” Tim Reardon said.

“The Parkinson Review recognised that migration is essential to Australia's long-term economic growth and that migration, infrastructure and housing policy must operate as an integrated system.

"The solution is not to deny that migration creates demand for housing. The solution is to ensure housing supply can respond to that demand."

"The evidence is clear. Rents are rising, prices are rising and vacancy rates remain critically low. Australia is not building enough homes to meet last year’s demand growth, let alone reduce the housing shortage that already exists.

"Achieving the Housing Accord target of 1.2 million homes is therefore not optional. It is the minimum required if Australia is to restore affordability and give more Australians access to secure housing."