Australia is staring down the barrel of a housing downturn, a new report has found.
According to the Housing Industry Association’s National Outlook report, housing starts are forecast to decline by a further 4 per cent as federal stimulus for housing construction starts to wind back.
“The fact remains we are not building enough homes to match demand, and going forward our national housing shortage is expected to worsen,” HIA chief economist Dr Harley Dale said.
“Renewed weakness in new home starts in 2011 would mean there were only two years in ten when starts have risen. That is an appalling result, which highlights the challenge Australia faces in addressing a large and growing housing shortage that will place considerable further pressure on rental markets.”
The report found that by calendar year, housing starts are forecast to increase by 24 per cent in 2010 to a level of 171,442, before dropping by 9.5 per cent in 2011 to a level of 155,155.
“Stimulus measures drove a short-lived recovery in new home building and helped Australia avoid a recession. However, if we want to address Australia’s housing shortage then the Federal Government needs to lead from the front on a range of policy areas including further investment in skills and training, reform of the tax system, an end to excessive regulation, increased land supply, reduced planning delays, and ensuring greater competition in the banking sector so there’s adequate finance for development,” Mr Dale said.