Population debate overshadows housing shortage: economist


“There are two parts: you either say that we throw up our hands and we can’t get to that point so we need to slow down our population growth, but then we wear the second round and third round negative effects of that on the economy… or we have to do something even more fundamental in terms of trying to enable housing supply,” he said.

He says the pressure on Australia’s housing supply is only increasing as the positive effects of government stimulus programs fade.

The report by BIS Shrapnel says building starts will be flat between now and 2012.

Mr Anderson says that is going to compound the current problem of housing shortages, and drive rental costs and house prices even higher.

“Even though we’ve had for most of the last 18 months, very favourable interest rates, a very successful scheme in terms of first home buyer demand, we haven’t really pushed up towards the level of supply that we need to match it in terms of population growth,” he explained.

The company’s Building in Australia report says Federal Government stimulus programs were largely responsible for the 15 per cent rebound in the value of national building starts throughout the last financial year.

Mr Anderson says that means private sector investment in construction is desperately needed to replace the publicly funded boost.

“The first home buyers boost scheme, social housing and education programs have proven to be very effective and they’ve basically clawed back all the losses,” he explained.

“We will have definitely a lower rate of public spend coming through even in the next 12 months, and even in the year beyond that.”

Tags: business-economics-and-finance, economic-trends, building-and-construction, housing, international-financial-crisis, australia

First posted 1 hour 34 minutes ago

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