HOUSING SHORTFALL PROJECTED TO BE 308,000 IN THE NEXT 4 YEARS

The Federal Government's National Housing Supply Council (NHSC) report highlights a looming shortfall in property to meet with Australia's increasing population.

The report found that in the 2008-09 financial year, the gap between supply and demand increased by approximately 78,800 dwellings in the year to June 2009, to a cumulative shortfall of 178,400. These results significantly exceeded the council's previous projections which have resulted in a revision to supply forecasts as follows:

• By 2014, the overall gap is projected to grow to 308,000 dwellings, and
• By 2029, the cumulative gap is expected to explode to 640,600 dwellings.

The report notes that, ?The economic environment has changed in the past 18 months from a period of moderate interest rates and sustained high levels of economic growth to the sudden and major disruption of the global financial crisis. Associated changes in the housing market and building activity have had significant short-term implications for housing supply.'

?The greatest pressures are likely to be in south-east Queensland, Melbourne, New South Wales and Perth. Around two thirds of the additional demand is projected to be in and around four of the major cities: Melbourne (19%), Sydney (16%), Perth (10%) and Brisbane and surrounding areas of south-east Queensland (21%),' the report said.

With detached Housing Approvals falling by 13.9% in April it seems unlikely that the shortfall will be made up any time soon.

While it would appear price growth has cooled for the moment after the significant spike in 2009 it is likely under supply will place pressure back on prices in the mot too distant future.

About the National Housing Supply Council

The National Housing Supply Council was established in 2008 by the Treasurer and the Minister for Housing to monitor housing demand, supply and affordability in Australia, and to highlight current and potential gaps between housing supply and demand from households.

Each year, the Council releases an updated State of Supply report, which projects underlying demand and land and housing supply over 20 years, and measures the gap between demand and supply, with a particular focus on affordability for all levels of government, industry and the private sector.

For more information or to view the full report, visit www.nhsc.org.au