Housing supply remains an issue
The issue of housing supply is contentious at the best of times. It is not unusual for seemingly conflicting data and reports to be released almost concurrently – sometimes we are told that there is too much stock on the market and people aren’t buying, at other times it is that there are not enough homes and prices are skyrocketing.
It is important to understand that the residential property market has both a short term and long term outlook, both of which can be affected by different factors. Interest rate rises, for example, often act to cool the market a little bit, as prospective buyers absorb the prospect of an increased mortgage rate and wait to see the general impact of the news on the market. Hence, we often see periods of reduced auction clearance rates, even when supply is thought to be a larger issue.
The concept of Australia’s supply issue therefore, is something which must be considered both in today’s terms, as well as in the context of Australia’s future population and accommodation needs.
An article appeared in the Australian Financial Review on January 28, entitled ‘Housing supply plans suffer’. I found that the article highlighted some very interesting points regarding Australia’s housing supply and affordability issues and so I thought I would draw your attention to it.
The most concerning aspect raised by the article was its discussion of the Australian Government – questioning Labor’s commitment to tackle worsening home affordability. As shelter is one of the most important needs of individuals and families, it is problematic to be facing a housing supply shortage while having a government who are not instigating the necessary reforms so that a reversal in the situation can be achieved.
The article refers to concerns regarding the future of the National Housing Supply Council, created after the Labor party came into power in 2007. The Council has produced two annual State of Supply reports, which so far forecast that Australia’s national housing shortfall will exceed 300,000 by 2014 – quite an alarming figure.
With the appointments of its nine committee members having lapsed midway through last year (except for its Chair), combined with a restructure of governmental responsibilities, the Council’s work has been understandably affected. The article quotes Population Minister Tony Bourke as saying that the Gillard Government is committed to continuing the council’s work, however it is of concern that new members have not yet been appointed.
It remains to be seen what the fate of the Council will be. Having said that, I think that it is imperative for such an organisation to exist, if only to shed light on a situation that will continue to of concern. It has once again become seen that the Government may need some policy emphasis with regards to housing – or the shortage numbers that are already evident will continue to grow.