Australian economists are appealing to the federal government to take action to resolve the escalating housing shortage problem.
The Housing Industry Association’s chief economist Harley Dale said they are anticipating that new housing construction numbers will be down by 15 per cent in 2011, wiping out a most of the short-lived, stimulus of 2010.
“The fate of residential building in 2011 has been all but sealed by higher interest rates, continuing tight credit conditions, and a complete lack of progress on policy reform to reduce excessive new housing costs,” Mr Dale said.
Whats putting additional pressure on the housing market is unprecedented population growth – especially in Melbourne. According to reports today from the Australian Bureau of Statistics, Melbourne is experiencing a population surge, growing faster than any other Australian city. The figures show Melbourne’s population boom accounted for one third of the nation’s growth in 2009-10.
Melbourne’s population increased by 79,000 last year to help push Australia’s population up by 257,800.
Given the drop in new development due to both higher cost and stricter qualification criteria for home loans and construction loans, the housing shortage problem is only getting worse each year.
The housing supply crisis we are experiencing requires urgent and definitive action from the federal government.
Mr Dale said it was now up to the federal government to not impose any new taxes that have an impact on the cost of new housing.
In addition, Mr Dale said the government would be well placed to resume specific action to reform the supply side of Australia’s housing market, including assisting states to remove stamp duties on new homes and removing planning and development bottlenecks.