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Strong pipeline in sight for residential development in Australia

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Australia's growing and ageing population is set to drive huge demand for housing over the coming decades, which could be good news for property developers across the country.

The Housing Industry Association (HIA) recently released the first edition of its Housing Australia's Future report, which looks at the likely housing requirements in each state and territory. Projections are based on forecasted population and real income growth, with the HIA modelling various scenarios and how these will affect housing demand.

According to HIA Economist Geordan Murray, the most likely situation would see the requirement for new housing from now until 2050 to well exceed that of the past two decades.

"In 2013/14, the number of new homes built was about the same as the number of new homes demanded by the population during the year," he added.

"Unfortunately a match of this kind is an aberration - throughout much of the last decade there was a considerable mismatch between the level of demand for housing and the amount of new home building."

As such, he expects that the country will need to build around 186,000 new dwellings a year on average, based on the projection of a medium rate of population and income growth. This figure encompasses 152,000 homes for new households, as well as anywhere from 30,000 to 35,000 dwellings to accommodate additional demand due to increasing incomes.

"The challenge for governments is to ensure that policy settings will enable alignment of demand and supply to persist over the long term. This is a policy area deserving of prioritised and coordinated action from all levels of government," Mr Murray concluded, pointing to impending government activity such as the taxation review.

Property developers should use the latest technology to take advantage of the likely surge in demand for housing, using feasibility tools, for instance, to guide their decisions.

Date Published: 17 Oct 2014
Category: General News

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