Housing stress getting worse - experts

By Stephen Lunn, The Australian, 6 November 2009

AUSTRALIA'S already serious shortage of affordable housing is being made worse by finance bottlenecks for multi-unit property developers, and the crunch will continue for some time yet.

And while the Federal Government's multi-billion-dollar stimulus measures to boost the nation's social and community housing stock will eventually add 20,000 homes, it's a drop in the bucket given that 250,000 houses are needed to meet the immediate demand, let alone future needs as the population quickly rises.

Continuing pressure on the housing sector, the social consequences of so many families being priced out of the market and the urgency of a concerted national response emerged as the hot-button issue of the Road to Recovery conference presented by The Australian and the Melbourne Institute yesterday.

"We've got to really get going when it comes to building a supply of housing or we'll hit capacity constraints that will hurt us in the very near future," Wayne Swan said in his keynote speech.

Economist Saul Eslake, from the Grattan Institute, said despite the global financial crisis turning out to be a predominantly northern hemisphere phenomenon, it is playing an ongoing part in restricting the supply of housing in Australia.
"One lingering effect of the financial crisis which is likely to exacerbate the housing shortage for some time yet to come is the difficulty which proponents of multi-unit housing developments are continuing to encounter in gaining access to finance," Mr Eslake said.

"The debt securities market remains for all intents and purposes closed to property developers, and financial intermediaries have become more conservative in their lending for large scale residential property development," he said.

"As a result, approvals for new multi-unit housing remain at historically low levels.

"Yet this is the type of housing of which we need considerably greater supply, not only to address affordability concerns but also on environmental, sustainability and traffic congestion criteria."