It doesn’t matter whether you’re buying or selling a home, the construction industry plays a big role in supporting the market. Home ownership has never been more desirable and a good supply of new homes for Australians will make sure this remains on the cards. However, the Australian Treasury’s 2015 Intergenerational Report has thrown a spanner in the works.
The report examines the impacts of population growth and how prepared the country is to deal with them. One of the most staggering figures to come from it is the expected rate of population growth. It suggests that Australia’s population is supposed to expand 1.3 per cent year on year for the next forty years. By 2055, there will be around 40 million people, an eye-watering increase on the 23.7 million people of today.
This begs the questions of housing supply and how your construction loan translates into a new home. While building approvals rose 1.3 per cent in January according to the Australian Bureau of Statistics, Master Builders of Australia CEO Wilhelm Harnisch said the country will need 9 million new homes to keep pace with the population, which is more than double the current housing stock.
“The key challenge will be to tackle intergenerational housing affordability in order to preserve home ownership as a fundamental pillar of Australian economic and family life over the next 40 years,” he said in March 5 release.
Mr Harnisch also pointed out that state and local governments have the biggest role in removing red tape and putting a spring back into the market’s step. This also means making sure there are affordable options for people taking out first home loans.
“This will demand a serious commitment to reforms to counter supply side impediments that drive up house prices,” he noted.
The report has added a fair bit of fuel to the policy change fire. Residential construction is both the challenge and the solution to Australia’s rapidly growing population, and industry commentators have been crying out for governments to take down some of the biggest barriers to new home building.
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