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【Mike Nahan Column】Australian Housing Shortage

时间:2010-04-01 17:53:09来源: 作者: 点击:

Australia has a growing shortage of housing in every small and large city in Australia.
 

This is, of course, good news for investors, as it means house prices will inexorably rise even from their already exorbitant levels. But it is bad news for the many people trying to get into the housing market.
 

I think it is also bad news for the economy, as it means that a large and growing proportion of the nation’s wealth is locked-up in over priced assets and household debt will continue to soar.
 

A Commonwealth Government study released last week found the rate of construction of new houses per head of population to be the lowest in at least 30 years resulting in 100,000 prospective home buyers being kept out of the housing markets. This report forecast the shortfall to continue and reach 500,000 homes by 2029.
 

What is driving the supply shortage?
 

First, population growth is pushing up demand. Australia has the highest rate of population growth of any country - outside Africa. The driving force is new migrants. Australia’s migrants are overwhelmingly skilled, employed and seeking to put down roots and buy a house. There are also a growing number of Australians returning to Australia from Europe and America and entering the housing market.
 

Second, the GFC resulted in a large decline in housing starts of 33% between 2006 and 2009.
 

Third and most significantly, the planning system has constrained the supply of housing.
 

To meet demand, the Perth metro area needs at least 25,000 new dwelling units per year. This level of production has not been achieved in decades and last year, production was 10,000 dwelling units short of demand.
 

The key constraint is land. Planners have their collective foot firmly on the land supply process. As a result large tracks remain stuck in the planning process and the supply of new blocks is chronically below the level of need. In Perth, the supply of new housing blocks hit a decade long low of just under 10,000 blocks last year.
While the housing shortage could be avoided, it would require either a dramatic cut in immigration - which I am strongly against - or a dramatic change in the mindset of planners.
 

Without these changes, all I can say is hang on to your investment property.

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