Last week the Australian population reached 25 million – a milestone achieved 33 years sooner than expected.
While it’s good news for the country’s economic growth, housing supply must remain strong to guarantee affordability for future generations, according to the HIA.
“Clearly growth has occurred faster than the experts predicted,” HIA deputy managing director Graham Wolfe said in a statement. “If these predictions are to be realized we must find a way to keep new, affordable homes coming into the market to ensure supply is maintained across the country. To do otherwise would see Australia continue a pattern of undersupply, ongoing affordability challenges and further reductions in home ownership rates.”
According to Wolfe, Australia needs to maintain an annual supply of 230,000 new homes across all states for the next 30 years if the country wants to keep its housing supply growth in line with its population growth.
While aware that the steep cost of supplying new housing primarily affects the affordability challenge, with nearly 40% of new house and land packages made up of taxes and charges, Wolfe recognises a stable supply chain sustains greater assurance in affordability.
“Governments must recognise that growth in the housing sector and improvements in housing affordability will not be realised by making ad hoc changes to negative gearing, capital gains tax or charges on foreign investors,” Wolfe said.
He also encouraged both state and Federal governments to reach a unified agreement on developing mechanisms that will measure and manage land supply across the nation, so “a consistent supply pipeline can be sustained to meet housing demand.”
For Wolfe, a strong housing sector amid a population boom doesn’t just mean more affordable houses; it also means more jobs and generally a more prosperous economy.
The first Intergenerational Report in 2002 estimated the country’s population would reach 25.3 million in 2024. The 2007 report predicted the number would be reached in 2027. By 2010, the population was already 22 million, and the IGR estimated the number would go beyond 25 million by 2020. The 2015 report sees the population climbing to 39.7 million by 2055.
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