National Housing Supply Council releases Housing Supply and Issues Report for 2012-13

THE National Housing Supply Council this month released its Housing Supply and Issues Report for 2012-13, which covers a number of topics including housing stock and tenure, housing occupancy, policy developments and the effects of migration and an ageing population.

The report also examines how the residential development and construction industry is responding to the fall in demand associated with high house and land prices and reviews changing arrangements for planning, development approval and infrastructure provision across States and Territories.

The Council, which was was established in 2008 to assist the Australian Government improve housing supply and affordability for home buyers and renters, said the generally soft housing market has presented a difficult operating environment for the industry and may exacerbate housing shortage issues.

"A sluggish house purchase market and subsequent low volume of new supply coming onto the market potentially exacerbates the problem of inadequate supply," the Council's report states, with its most recent State of Supply 2011 report predicting a housing shortfall of around 215,000 dwellings in 2010-11.

The Council states that while several commentators in the real estate and finance sectors used the Census 2011 counts of population, dwellings and households to conclude that housing supply and underlying demand are in balance, it reiterates its belief that supply growth has been below the level required to support housing demand.

The report outlines changes to household formation and housing demand, based on Census 2011 data, including that detached houses have declined as a proportion of all dwellings, while medium and higher density dwellings have increased.

"Detached housing still accounts for the majority of new supply but to a lesser degree than has been the case historically. The higher rate of growth of apartments vis-a-vis detached houses is confined to capital cities and most pronounced in Victoria and the Australian Capital Territory (ACT)," the report writes.

The report also finds that tenure patterns have changed significantly and predicts that the aggregate rate of home ownership will fall and the proportion of renting will increase.

"Tenure patterns have changed significantly, with fewer younger and middle-aged people owning their own home and, across all age groups, fewer owning outright. The rate of home ownership in Australia is being sustained at about 70 per cent of households in private dwellings by the high rate of ownership of the present generation of older people," the report states.

The report also comments on the challenges posed by an ageing population and migrants; the latter of which it says have differing needs – which change over time – with regards to tenure type, household size and type and housing size depending on factors such as visa group type, country of origin and whether they are permanent or temporary migrants.

The report cautions that while "metropolitan planning frameworks in Australia assume that Baby Boomers… will represent an obvious market for smaller properties in well serviced, highly accessible locations", older people may in fact be driven by a range of factors that may not align with such policies.

"While it is appropriate to consider how more 'efficient' use of existing housing stock could be encouraged (to contemplate enablers and incentives to facilitate and promote downsizing), it is also important not to assume that the aged are more inclined than other cohorts to make financially efficient or 'rational' housing choices rather than respond to the non-financial attributes of neighbourhoods and homes," the report writes.

"Indeed, freed from the need to live near their workplace, some may be attracted to 'sea change' locations that have few of the services that most older people will need sooner or later, and/or they may be heavily influenced by the security and familiarity of their present neighbourhood; the location of family, friends and familiar service providers; the financial and emotional cost of change; the burdensome logistics of moving; declining resilience and adaptability; or simply inertia."

The Council also found that there have been "innovative responses to the shortage of affordable housing in the residential development and building industry including smaller allotments, smaller dwellings, and well-designed medium and higher density dwellings, including in greenfield locations." 

However, Council Chairman Owen Donald said inadequate planning and provision of infrastructure and restrictive regulation have had negative impacts on housing demand and housing production.

'It is clear to the Council that housing demand and housing production have been diminished by inadequate planning and provision of infrastructure, and restrictive regulation, notably in the development approval arena, all of which are primarily the responsibility of state, territory and local governments," Dr Donald said.

"Also contributing, partly as a consequence, have been changes in access to finance for producers and consumers, the rising cost of land, labour and materials, and rising house prices over most of the past decade."

The report, Housing Supply and Affordability Issues 2012–13, as well as four related scoping studies, are available from the National Housing Supply Council website at <>.

Subscribe to our Weekly Newsletter

Newsletter Subscription - Banner

Urbanalyst Banner