Looking to the Future In Property Investing
Investing in property is a sure way to grow wealth, but it is obvious that any upward growth in wealth is not a smooth path.
Keeping a focus on growing wealth is a long term goal and with that in mind it is always mindful to know what expectations are being made by government bodies or industry bodies for the future.
Housing Industry Association (HIA)
The recent Housing to 2020 report shows that if the current rate of building growth persists then the housing shortage in Australia by 2020 would reach over 460,000 dwellings. This is the first report that has shown estimates of Australia’s housing shortages right down to the Local Government Area (LGA).
There are reports on 669 LGA areas in Australia and there are shortages in just less than half of these areas. The worst are Brisbane and Sydney. Interestingly, Sydney and South East Queensland are also the highest demand areas. This combination is going to create huge shortages in the future if not addressed urgently.
Currently the housing shortage in Australia is 109,000 dwellings and it is set to keep on growing if there are no changes to the current rate of building.
Building is restricted by the lack of suitable land available for redevelopment and host of other factors including, planning restrictions, onerous regulations biased toward new housing, labour shortages and taxation structures.
There are several outcomes from these shortages:
- there will be a lack of affordable rental properties
- the ideal location of rental properties for tenants will only worsen
- existing home prices will continue to remain high, forcing upward pressure on interest rates
- skilled labour which is already a problem will become more of a problem as the resources sector attracts workers from the already tight labour market
The housing market and the resources sector will be competing with each other for labour in years to come as there seems to be no real slowing of demand in either area.
Filed Under: Property News
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