Geordan Murray, economist at the Housing Industry Association, said that after many years where new housing supply has fallen short of demographic demand, housing affordability has become a perennial problem in several parts of the country.
"By the year 2050, it is highly likely that Australia’s population will lie somewhere between 34 million and 42 million. This range implies a very wide array of possibilities, any of which will have a significant determining influence on the amount of residential building activity required in the intervening period,” Mr Murray said.
“Depending on the pace of population increase and improvements in living standards, as many as 250,000 new dwellings could be required annually. However, this would require an environment of sustained strong economic growth and commensurately high migration. The more likely mid-range growth scenario involves a required build around 188,000 new homes per year.”
“Worryingly, we have only reached the annual level of output required under the mid-range growth scenario on three occasions over the past thirty years. In the absence of substantial policy reform, the risk is that a serious housing deficiency will remain the norm in most capital cities across the country.”
According to Mr Murray, ensuring that housing supply matches the needs of each community is a near certain way to ensure housing affordability improves.
“This will require the right number of homes and the right mix of dwelling types being built in the right places,” he said.
Mr Murray added that while debate about housing supply has recently been caught up with speculation about possible changes to negative gearing rules, it is important to remember that there is a multitude of more important avenues for reform if policymakers are to ensure an appropriate supply of new housing.
“The burden of taxation on new home-building is excessive, planning processes are too slow, land supply is inadequate, and we need to see more equitable funding models for the community infrastructure that supports residential development,” he said.