Australia’s affordable housing shortage will remain a problem for the next 10 years, according to a new report from the Housing Industry Association (HIA).
HIA chief economist, Harley Dale, said record low housing affordability was delaying a recovery in residential building, as confirmed in the HIA National Outlook for the September 2007 quarter.
“If the affordability crisis is left un-checked then the shortage of housing stock will extend through to the end of the decade,” said Dale.
HIA has called for reforms from the three tiers of government, urging them to reduce complex and costly red tape and contribute more to infrastructure that supports residential development.
HIA has also called for the establishment of a $3bn Residential Infrastructure Fund to provide for planning and building regulation reforms from federal coffers.
HIA’s senior executive director for industry policy, Chris Lamont, said: “Given the underlying requirement for housing which continues to exceed supply, housing affordability will remain depressed unless there are positive steps taken to increase the supply of affordable new homes.
“It’s essential that all levels of government recognise the need to fund urban and residential infrastructure. Neither investors nor would-be new homebuyers can continue to pay for services that should be provided by governments.”
The undersupply of new housing has helped fuel a rise in renovations, with increasing government taxes and charges pushing some new buyers to renovate their existing homes as a more affordable alternative.
HIA reports that total investment in renovations hit a new record of $28.2bn in 2006/07 and growth of a further 10% is anticipated over the next three years.