More than 1.7 million new households are expected to form in the next decade, according to the latest research from the National Housing Finance and Investment Corporation (NHFIC).
The report provides analysis into housing demand and supply across Australia, as well as providing long-term projections, to identify potential drivers of, and challenges to, housing affordability.
More than 550,000 new dwellings will be completed by 2024, with detached dwellings leading the cycle. Positive construction activities are driven by low interest rates and continued government stimulus amid the pandemic.
NHFIC revealed that the strongest growth in new households was from lone persons at 595,500, followed by couples at 488,000 and families with children at 361,000, but only less than 10% of properties in Sydney and Hobart are currently affordable to more than 60% of households.
As international borders are reopened and labour shortages are addressed, the addition of new net housing supply is also set to outpace new household formation by 115,300 in 2022 and 35,500 in 2023. This recovery comes after construction was stunted in 2021 when supply constraints resulted in housing materials soaring by 20-34%.
The construction of new households can ease this lowering affordability, but its delay could put a hefty price on the rental market.
“If authorities actively slow or impede the flow of new housing supply, it can exacerbate upward pressure on rents and prices, something that should be avoided if improving housing affordability is a primary objective,” the report said.
NHFIC gave an estimate of six years to get new housing supply to the market.
