AUSTRALIA needs to build in more than 230,000 homes every year to address its housing affordability challenge, according to the Housing Industry Association.
The association has released a report, Housing – Australia’s Future, which presents a number of scenarios based on future population growth and wages growth to estimate the number of new homes required to avoid exacerbating the housing affordability challenge.
Housing Industry Association chief economist Tim Reardon said during the past 15 years Australia’s housing market had been dominated by a persistent undersupply of housing – the underlying cause of the rapid acceleration in prices and ultimately Australia’s housing affordability crisis.
“The excessive cost of supplying new housing lies at the core of the affordability challenge,’’ he said.
“This has been recognised by a number of key organisations including the RBA and the Productivity Commission – federal and state Treasury’s have identified the supply of housing as the key problem.
“In 2016 Australia built a record number of 230,000 new homes and we will need to maintain this rate of annual supply for the next 30 years, if we are to meet future housing needs.
“The enormous pent up demand for housing in metropolitan areas is now being met and for the first time in 15 years the supply of new housing is in balance with the demand for new housing.
“Housing affordability will not be solved by amending negative gearing, capital gains tax or imposing punitive charges on foreign investors.
“Such measures increase taxation on housing and further raise the cost of new supply, which is already excessive and inefficient.’’
He said meaningful action needed to include all three tiers of government, working with industry, to ensure the delivery of affordable residential housing.