Calls for more housing construction to meet population demand and curtail rising prices

Everyone knows that Victoria’s population is booming. But is new housing keeping up with the demand? A development forum has heard there’s a need to build more homes in the state.

The property industry is calling for more housing construction.

States like Victoria need to build more housing to keep up with population growth and curtail rising prices, a forum has been told.

ANZ assistant property director Daniel Gradwell said there was a huge boom in housing construction.

“But the point is, all it’s doing is absorbing the increase in population,” he told an Urban Development Institute of Australia event in Melbourne.

“Even if population growth does slow a bit further from here it’s never going to slow back to where we were 20 or 30 years ago … and the simple calculation behind that is that we need to keep building to absorb that population growth.”

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Melbourne’s population is booming.

Victoria was the fastest growing state in 2017-18, adding an extra 138,200 people to reach 6.45 million by June 30, according to the Australian Bureau of Statistics.

A recent ABS report said that with continuing high migration, life expectancy and fertility levels, Melbourne’s population could more than double to 12 million by 2066.

Kathy Johnson, from property consultancy Wingate, said the level of construction was not high enough to supply the growing population.

“That provides a lack of rental stock, and therefore rents are going to increase, but it also provides a lack of availability of stock for first home buyers as well,” she said.

“Ultimately it will lead to further price growth and less affordability.”

Victorian general manager of residential developer Satterley Jack Hoffman told the forum that population growth was vital for the economy and the property industry.

“The government needs population growth, it’s kind of a self-fulfilling prophecy in a way,” he said.

“Population growth helps to grow the economy and that underpins demand.”

“We need to try to encourage people to keep coming to the state, whether they’re coming from overseas or coming from interstate.”

Urban Development Institute of Australia's Victorian chief executive Danni Hunter

UDIA Victorian CEO Danni Hunter said government should streamline planning processes to allow developers to supply homes to meet population growth demands, but also first-home buyers, downsizers and “anyone else who needs a new home”.

“The development industry is doing everything it can to try and ensure there’s an adequate supply of housing for our growing population, but we need support from the government on this, not policies that are going to limit the industry’s financing and investors,” she said.

Mr Gradwell said tighter lending by the banks had affected housing investment levels, but

this policy would be appreciated later.

“I know it’s a fair adjustment we’re going through now, but it does mean that we are a lot more resilient to anything going wrong in the economy,” he said.

“The economy has been really resilient so far to what’s happening in terms of falling house prices.”

@JMasanauskas