Alternative Solutions: Solving the Housing Supply Issue
The reality of owning a house has decreased for many Australian households due to lower affordability and low supply. According to the Australian Bureau of Statistics, dwelling approvals have declined by 21.8% since 2021.
Additionally, the Housing Industry Association reports that one in five home building contracts are being cancelled per month, which is expected to continue affecting the supply pipeline.
PRD Chief Economist, Dr Diaswati Mardiasmo, believes now is the time to discuss real, practical solutions to addressing the housing undersupply.
“We know the root to our housing crisis is an undersupply”, Dr Mardiasmo said.
“The good news is we are not alone in this issue – there are many other countries who have or are currently experiencing this.”
PRD Managing Director Todd Hadley said the Alternative Solutions: Solving the Housing Supply Issue report serves as a conversation starter to solving the issue.
With inflation increasing by 7.8% in the 12 months to December 2022, continued interest rate hikes, and international migration returning, there is an increasing need to focus on future-proofing the Australian real estate market.
Five potential housing supply solutions are provided in the report, with each evaluated against five criteria.
“There are many housing supply solutions that we can draw upon from other countries. The challenge is implementing it within the Australian context,” Dr Mardiasmo said.
“Our government system is such that each Government level has autonomy in their housing strategy. Thus, unfortunately there is not just one perfect solution. It is more likely that we will need to have a multi-faceted solution, a combination of 2 or 3 solutions that is provided in the report.”
“The Housing Supply Solution report provides a wide variety of options, all of which have been evaluated against a set of criteria. This gives a richer landscape for different Governments across Australia to select and adopt a solution that suits their area best,” Mr Hadley said.
The PRD Alternative Solutions: Solving the Housing Supply Issue report concludes with a map detailing 20 Top Residential Development Pipelines across Australia, visible from 31 January 2023.
Additionally, the Housing Industry Association reports that one in five home building contracts are being cancelled per month, which is expected to continue affecting the supply pipeline.
