Oxford Economics Australia head of property and building forecasting, Tim Hibbert, has warned that Australia is facing a sustained housing shortage that will take years to unwind (if at all).
The reason is simple: Australia’s population is growing rapidly courtesy of the federal government’s extreme immigration policy, while the home-building sector is facing recessionary conditions.
“With dwelling approvals running at this rate and strong population growth playing through, a sustained mismatch between demand and supply for housing will persist for a number of years”, Hibbert said to The AFR.
“Dwelling commencements are expected to slide to around 150,000 this financial year. Planning lags mean it will take until the back half of the decade to see an activity boost”.
The comments came after the number of dwellings approved for construction in the year to October collapsed to just 164,200, which is around 76,000 less than the Albanese government’s target of 240,000 new homes a year:
Meanwhile, HIA Senior Economist, Tom Devitt, warned that the RBA’s aggressive interest rate hikes will push the home building sector into recession next year:
“Australian home builders had a significant pipeline of work under or awaiting construction when the RBA started increasing interest rates in May 2022. This pipeline has kept Australians employed and the economy going for over a year, obscuring the impact of the sharpest rate hiking cycle in a generation”.
“This pipeline is now shrinking and in 2024 home builders will be starting construction on fewer new houses than at any time in the last decade”.
“We have known this was coming for over a year. Leading indicators like new home sales, housing finance, building approvals and consumer confidence have been depressed all year”.
“With home building pipelines now shrinking, 2024 will be the year that these lagging indicators start to reflect the full impact of what the RBA has done over the last year and a half”.
Surging population demand amid crashing supply is a recipe for disaster and will mean that Australia’s already gaping housing shortage will inevitably get worse:
Lower income Australians should prepare for a future of living in cramped share housing or homelessness. Because that is what they are facing under the Albanese government’s mad immigration policy.
