With rising population of migrants in Australia, the country needs millions of new homes, but market factors such as shortage of labor and rising rental prices are worsening the situation.
The Australian Housing Industry Association (HIA) said that Australia will need one million new homes in the next five years to meet the demand for new homes stemming from the rising population of immigrates, as reported by theage.
HIA further revealed that 190,000 new homes are needed in 2008-09, an increase of 40,000 than expected production. However, the current construction projects of new dwellings are well short from the requirement. In view of present rate of home construction, there will be a shortage of 175,000 units, and the situation might get worse if the new home sizes keep shrinking because more people prefer living alone. Hence, the shortage could reach to 240,000.
The expected rise in home demand in Australia is mainly based on a record flow of immigrates in the country and the housing industry’s incapability to fulfill the rising demand. The problem is further aggravated by the decline in number of people in a house.
Besides, the rental costs have substantially flared up due to housing industry’s failure to increase the housing production; consequently, many families are migrating from expensive rental states to affordable ones. Another important reason for lack of houses in Australia is sharp rise in public housing waiting lists.
Moreover, the Australian housing industry is struggling with the shortage of skilled labor. Though a big proportion of migrants is constituted by skilled people, the construction industry fails to attract it because of low wages. Apart from this, the housing industry is plagued by limited release of land and less investment.
In the wake of present shortage of homes, the housing association in Australia has doubts whether the number of new homes under construction will fulfill the demand or not.
According to a Research Analyst at RNCOS, “The Australian housing industry will require to build millions of homes in the next five years as the migrant population is continuously rising in the country. Lack of new homes has pushed up average home prices that result in fall in housing affordability. Hence, the construction industry should take necessary steps to boost the housing industry and to encourage people for buying new homes.”
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