The Housing Industry Association’s latest National Outlook reveals that although current levels of home building activity are soaring, there is unrealised demand for detached housing because of barriers to supply.
“A lack of focus on housing policy reform is shutting Australians’ out of their new home at a time when they could borrow responsibly at attractive interest rates and be part of the great Australian dream,” said HIA chief economist, Harley Dale.
“It is disappointing that despite record new housing supply, many Australians are being priced out of the market due to the excessive and inefficient taxation and regulation governments’ impose on the new housing sector.”
Dale said the record breaking new housing construction levels are “
single-handedly propping up Australia’s domestic economy” and although the HIA has forecast for 205 490 dwellings to start being built over 2014/15 versus 181 000 over 2013/14, levels are well below where they could have been.
“The detached house construction cycle had peaked well below its potential because households can’t pay the cost of waiting up to 14 months for titled land, or multiple months for a simple building approval, or borrow the additional amount required to cover government-imposed gold-plating of user pays infrastructure.”
The report shows new dwelling commencements are set to grow for a third year running in 2014/15, increasing by 12.9% but that dwelling commencements will fall by 10.6% in 2015/16.