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Housing Shortfall Set to Balloon

Australia's housing shortfall is expected to blow out to more than 640,000 in 20 years, prompting industry calls for tax cuts and other measures to stop prices going through the roof.

The gap between demand and supply increased by 28,200 to 186,800 housing units this year, a National Housing Supply Council (NHSC) report reveals.

The annual report on the state of supply shows NSW and Queensland had the largest shortfalls of 73,700 and 61,900, respectively.
Based on building trends and household growth, the report predicts the gap could grow to more than 640,000 homes in the next 20 years.
NHSC chair Owen Donald says more government financing for housing for low-income earners and financing support, along with changes to planning and development approval, could boost supply and affordability.

"Existing demand-side measures like the first home owners grant and commonwealth rental assistance could also be re-examined with a view to having a more substantial impact on housing supply and affordability," Mr Donald said in a statement.
While there had been some movement on land release arrangements and infrastructure in several states, much more was needed, he said.

Work was also needed on planning and development approval arrangements in most jurisdictions, he said, "with delays, uncertainty and adverse community reaction being major obstacles to increasing supply within existing urban areas".
Master Builders Australia chief executive Wilhelm Harnisch says there's an urgent need for all governments to address the problem through a coordinated policy approach.

Federal government programs to lift supply of affordable housing had been worthwhile but did not address the fundamental constraints driving the problems, Mr Harnisch said in a statement.

"Reducing developer charges and taxes such as stamp duties, speeding up development applications and increasing land supply are the key measures that would make a significant difference in solving both the housing undersupply and affordability problems.
"In the current economic environment, early action to remove the barriers to housing supply would assist in underpinning economic growth and jobs."

Housing Industry Association chief executive Graham Wolfe believes excessive and inefficient taxation and land supply remain high priorities for change.

"Taxation, levies and charges on a new house-and-land package can be in excess of 40 per cent of the purchase price," Mr Wolfe said.
"Independent economic modelling shows that the taxes on a new home are often in excess of the price of the land."
Mr Wolfe said access to land for development was a problem, and all levels of government should tackle the availability and affordability of housing for Australian families.

Newly appointed Housing Minister Robert McClelland said Wednesday's report highlighted the need to address the inescapable fact that growth in underlying demand for housing was outstripping supply.

"The report confirms that access to affordable housing is a challenge for many Australians," Mr McClelland said in a statement.
"We need to make sure housing supply matches the needs of our changing populations."

SOURCE: Nine MSN URL: http://finance.ninemsn.com.au/newsbusiness/8393198/housing-shortfall-set-to-balloon