Housing construction is set to increase to 180,000 new starts in 2015; however, this is still not enough to satisfy Australia’s severe housing supply shortage.
The Australian Residential Development Outlook released on Monday revealed there is likely to be 30,000 more new houses constructed in 2015 than previously forecasted, but activity still stops short of what is needed.
“The good news is that the forecasts for F2015 show residential development reaching 180,000 new starts, which adds tens of thousands of homes for Australian families than on previous years,” Residential Development Council executive director, Nick Proud said.
“On average, Australia builds 150,000 homes each year, but this is simply not enough to meet demand, let alone reduce the housing shortage. These increased construction rates are expected to continue for the next 12-18 months – but the challenge is to keep up this level of activity to meet undersupply,” Proud said.
Tim Lawless, national research director at RP Data – who collaborated with the Residential Development Council to produce the Outlook – said that although the increased demand for housing credit will feed into construction activity, he is still remaining cautious.
“Factors such as rising unemployment rates and falling terms of trade could lead to a drop off in the number of new starts from 2016 and this would not only worsen housing affordability, but put greater pressure on state budgets around the country,” he said.
Proud said the residential construction sector will need the support of the government if it has any chance of easing Australia’s housing shortage.
“Removing policy roadblocks, like planning systems delays and stamp duty costs, are essential to maintaining higher construction rates, offsetting changes to outlook indicators and improving affordable building into the longer term.
“State governments need to drive policy changes that will support the residential development industry, which in turn supports their budgets,” Proud said.