Issue 05 | Thursday 10 March 2022 | Is There Really a Housing Shortage Crisis?
Hi Andrew Bell with you, of course, we are all aware of the incredible weather phenomenon that has swept through South East Queensland and into New South Wales and beyond. So many parts of Australia with incredible personal suffering and economic shocks. Our thoughts go out to our fellow Australians who have had to endure so much in recent years.
The Gold Coast largely avoided the worst of what happened to other major centres. With the cell sitting almost stationary over Brisbane and the Sunshine Coast when it finally moved it seemed to pass through the Gold Coast quickly by comparison. We certainly got our fair share of flooding particularly in our northern and southern suburbs but noting in comparison to Gympie, Brisbane, and Lismore.
I couldn’t have been more proud of our property management team. Many being in difficult positions themselves, they rose to the occasion and our team of over 50 presented themselves with such professionalism and were on hand to mitigate the damage and loss. Personal risk to tenants, property damage and of course now the huge process of recovery and insurance claims really demonstrates why landlords need professional real estate agents experienced in this space. Having been named as Queensland’s property manager of the year for 3 years in a row we were certainly up for the challenge. If we can help anyone, please don’t hesitate to reach out to us.
Also thank you to all the many people who reached out in appreciation of a deeper understanding of some of the factors driving this question of interest rates. The jury’s still out on exactly what’s going to happen, but we know what factors to watch for.
Today I want to talk about one of the key drivers of the real estate market, and that’s population growth which factors into supply and demand. The National Housing Finance Investment Corporations State of the Nation’s Housing 2021-2022 report shows that whilst there’s negligible overseas migration at present when it does start to click back into pre-Covid levels by around 2025, the number of new households will start to outpace the supply of new homes to the tune of about 163,400 homes by 2032.
The Property Council of Australia, Chief Executive, Ken Morrison said the report highlighted Australia’s strong housing supply and affordability issues. That will be an average deficit of around 20,000 homes a year every year until 2032. The overall housing supply is expected to fall by around one third in just four years from 2023 and that certainly won’t help housing affordability.
Most of us would be aware that there are many parts of Australia where there already exists a huge housing shortage. We see it here on the Gold Coast where there truly is a rental crisis, often we will see 50, 60 or 70 applicants for just one property. It’s part of the reason why our housing prices have also been rising because there is such strong demand for the limited supply available.
We have been aware of these problems for some time yet both our State and Federal governments really have not been coming to the party with the correct planning and correct stimulus required in the supply area. A much more concerted effort needs to be done to have a clear plan to build the housing where it’s needed and to make it more affordable.
We have also got to build homes according to needs where, for example, the strongest growth in new households is expected to come from single-person households with an estimated 595,000, followed by families without children at 488,000 and then families with children at 361,000, we need to open the greenfield areas. You see the problem is, and the reports draws attention to this is that it can take more than 6 years to get new housing to market in certain jurisdictions. That’s a long lead-in time. This is where governments of all persuasions need to clear the blockages. We see the need for new housing right now and we see the affordability issues. To think it could take 6 years just to address the current issues is just way too long. The reports also show that there is a shortage of multi-unit dwelling completions with this expected to be in the next 2-3 years. This is the market that we look to help provide housing for our renters. Some things in dire need at present is higher–density dwellings close to the CBD.
So, it’s back to the position we have been in for a while and that is we have a genuine housing shortage through most parts of the country and most critically amongst rental accommodation, yet the report shows it’s going to take a mighty long time to get anything like a solution. So, expect housing shortages to be with us for a long time and a real problem about housing affordability. Great for those who own properties at present, but a real problem for those who don’t.
Lastly, a quick reminder we are getting down to very limited tables left for our annual Business Meets Sports. It’s always one of the great fun lunches of the year. So many of our leading businesses and sports coming together to hear from both some leading sportsmen and from some leading businessmen about where we are at present here on the Gold Coast in both Business and Sport. We make sure there are plenty of laughs on the day so for more information, whether you want to book a single ticket, come with a group of friends or take a table, you deserve to get out and have a bit of fun after years of lockdowns and restrictions. Look forward to seeing you there, more information and tickets here.
I look forward to being with you in a fortnight’s time and we will look at another topic that’s driving the real estate market at present.
Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group