Industry group declares reform is needed to ensure housing supply meets population growth

Planning for the nation’s future housing requirements should be a higher priority for policy makers according to the Housing Industry Association.

BCM Property Home Liftout: House project, Yarrabilba at Logan City, developed by Lend Lease. Streetscape of Yarrabilba.

PLANNING for the nation’s future housing requirements should be a higher priority for policy makers according to the Housing Industry Association.

The group’s latest report, Housing Australia’s Future, discusses the country’s new-home building needs under different scenarios.

While future requirements depend mostly on population growth, they are also affected by changes in standard of living and the replacement of existing residential stock.

HIA economist Geordan Murray said new housing supply had fallen short of demographic demand for many years and affordability had become a perennial problem in many parts of the country.

“By the year 2050 it is highly likely that Australia’s population will lie somewhere between 34 million and 42 million,” Mr Murray said.

“This range implies a very wide array of possibilities, any of which will have a significant determining influence on the amount of residential building activity required in the intervening period.”

New housing supply has fallen short of demographic demand for many years.

Mr Murray said sustained economic growth and high migration could mean up to 250,000 new homes were required annually. A more likely mid-range growth scenario involved a required build of about 188,000 new homes a year.

“Worryingly, we have only reached the annual level of output required under the mid-range growth scenario on three occasions over the past 30 years,” he said.

“While debate about housing supply has recently been caught up with speculation about possible changes to negative gearing rules, it is important to remember that there is a multitude of more important avenues for reform.

“The burden of taxation on new-home building is excessive, planning processes are too slow, land supply is inadequate, and we need to see more equitable funding models for the community infrastructure that supports residential development.”