New research conducted by housing researcher Macromonitor has found that the undersupply of housing in Australia is significantly smaller than previously thought.

 

The new Australian Construction Outlook – Residential Building report predicts a weak upturn in residential building over the coming years, with a much lower peak than past cycles.

 

The report concludes that a downward revision of the population by almost 300,000, coupled with changes in household formation behavior revealed by the 2011 Census, means that demand for housing is ‘substantially lower than previously estimated’.

 

The report’s author, Macromonitor Director Nigel Hatcher, says, “We now know that any housing shortage which exists in Australia is relatively small, and so a major boom in housing markets over the next few years is highly unlikely.”

 

“While there is some degree of undersupply in New South Wales, Queensland and Western Australia, there are also pockets of considerable oversupply, particularly in Victoria, South Australia and the ACT,” says Hatcher.

 

Macromonitor is forecasting an increase in the number of dwelling starts over the next three years of around 18%, peaking at just over 160,000 dwellings in 2014/15. The upturn is expected to be concentrated in just three states, New South Wales, Queensland and Western Australia. A decline is forecast in 2015/16.