Australia is facing a housing crisis characterised by high costs and insufficient supply relative to its population. Despite building more homes per 100,000 people than Canada, the US, and the UK, and dedicating a significant portion of its economy to housing construction, the sector employs around 1.35 million people. Yet, completion times are increasing due to poor supply chains, labor shortages, and low-quality construction. In New South Wales, half of the high-rise projects have significant defects.
The government aims to address this by focusing on the supply side, as outlined in the budget attachment "Statement 4: Meeting Australia’s Housing Challenge" from the Treasury. It acknowledges the housing shortage, emphasising that insufficient homes are being built in the right areas to meet community needs. The statement discusses the causes of the housing undersupply, its impact on affordability, and the necessary changes to accelerate housing supply.
According to the government, this undersupply is driving up rents, mortgage repayments, and house prices. However, while the government talks about solutions, the effectiveness of these measures remains to be seen. A critical issue is the high levels of migration, which should be curtailed to align demand with long-term averages. Both sides of politics have mentioned this during budget discussions, but as highlighted in my recent show "The Migration Question Amplified; But Not Tackled… By Anyone!", it often ends up as mere rhetoric.
In reality, neither political side seems ready to address the issue seriously, despite its direct link to higher inflation. Consequently, we can expect prolonged higher inflation, necessitating higher interest rates than would otherwise be required.
#housingcrisis ##rentalcrisis #auspol #massimmigration #BetterNotBigger #inflation
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