Housing shortage threatens living standards, economic growth: report (Australia)

AUSTRALIA’S housing crisis has worsened, with a shortfall of 186,000 dwellings prompting warnings of a slump in living standards and economic prosperity. In its latest report, the National Housing Supply Council found the gap between housing supply and demand widened by 28,000 dwellings in just 12 months. The shortfall is projected to blow out to 640,000 within 20 years, placing massive pressure on social housing and the lower end of the rental market. “This growing gap indicates that housing production needs to lift well above trend to reduce the likelihood that housing shortages and poor affordability impact adversely on economic growth and standards of living,” the council’s 2011 state of supply report warns. It says the current rate of new home building is “exceptionally low”, so the gap between supply and demand may widen even more rapidly than forecast in the medium term… Master Builders Australia chief Wilhelm Harnisch said government programs to lift supply of affordable housing …did not address the fundamental constraints driving the problems. “Reducing developer charges and taxes such as stamp duties, speeding up development applications and increasing land supply are the key measures that would make a significant difference in solving both the housing undersupply and affordability problems,” he said. “In the current economic environment, early action to remove the barriers to housing supply would assist in underpinning economic growth and jobs.” Housing Industry Association chief executive Graham Wolfe said excessive and inefficient taxation and land supply remained high priorities should be tackled as priorities. “Taxation, levies and charges on a new house-and-land package can be in excess of 40 per cent of the purchase price,”… “Independent economic modelling shows that the taxes on a new home are often in excess of the price of the land.” …access to land for development was a problem… (Excerpt) Read more at theaustralian.com.au …