Fasco-housing complex summit: Property shortages coming
September 26, 2019 | 4 comments
The AFR’s property rent-seeking summit is underway, with attendees warning that housing shortages are set to re-emerge as manic population growth outruns falling dwelling construction:
Treasurer Josh Frydenberg has taken the stage.
He says population growth has been a major driver for housing demand in Australia, noting the population grew by 1.7 per cent between 2005 and 2015.
But he’s noted dwelling investment is forecast to fall by 7 per cent in 2020 budget…
AMP Capital head economist Shane Oliver has said if housing approvals fall it could lead to a housing shortage as population continues to climb.
“That’s the issue of supply that needs to be addressed,” he said.
They are not wrong. As shown in the next chart, both approvals and commencements are crashing as population growth remains turbo-charged:
That said, it must be noted that income growth is also set to fall back so we may see some pressure released owing to weaker demand as more share.
This suggests firmly that “the issue of supply that needs to be addressed” is the demand-side of the equation. Australia will never sustainably balance the market as long as mass immigration continues.