Australia’s housing shortfall is growing

Australia’s housing shortfall is expected to increase from 186,000  to more than 640,000 in 20 years. The gap between demand and supply increased by 28,200 to 186,800 housing units this year, a National Housing Supply Council (NHSC) report reveals. The annual report on the state of supply shows NSW and Queensland had the largest shortfalls of 73,700 and 61,900, respectively. Based on building trends and household growth, the report predicts the gap could grow to more than 640,000 homes in the next 20 years. Master Builders Australia chief executive Wilhelm Harnisch says there’s an urgent need for all governments to address the problem through a coordinated policy approach. Newly appointed Housing Minister Robert McClelland said Wednesday’s report highlighted the need to address the inescapable fact that growth in underlying demand for housing was outstripping supply. Perth, Brisbane and Darwin will be the outstanding performers with median growth rates of 5 to 10 per cent. There has also been a slight increase in the number of home loans approved indicating that more people are planning to buy. This appears to be a change of thinking for some Australians as most had moved to a mentality of savings and slight belt-tightening in recent economic circumstances. This has been evidenced by the rising rate of home renovations reported by the Australian Bureau of Statistics. So, with the New Year almost upon us, will we see a major increase in housing market activity in January 2012 and beyond? The fundamentals look good and all indications are for a solid year ahead, but astute investors always remember that their focus should be on the long term benefits of property investment – not just the next 12 months or 2 years.