Those claiming shortage have seriously mis-calculated

By Michael Matusik, 30th August 2012

Regarding under-supply or not.  The key reasons we don’t have a generic under-supply – often quoted as being in the 200,000 range – are that household sizes are increasing (we have been saying such since late 2006) and that there are far fewer households than most reporting on housing supply realise.

The 2011 Census revealed Australia has 7.8 million households – 900,000 fewer than the National Housing Supply Council (for example) quoted in their dwelling supply forecasts – and also the country’s population grew by about 300,000 less over the last five years than was previously estimated.

Fewer households and the trend towards greater utilisation of homes are two factors serving to restrain new construction. These developments have implications for residential construction builders and developers, potentially restraining activity over the medium-term rather than just the next few quarters.  Note that we wrote trend, not fad or fashion.

Rising household size was happening before the GFC. In addition to having fewer actual households, close to 935,000 (or 11%)  of our residential properties are unoccupied - this is up from 830,000 five years ago.

There is no generic under-supply.

Michael Matusik

Michael Matusik is a leader in residential market analysis and property advice in Australia.

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