Latest NewsHousing Shortfall Worsening: ReportMonday, 09 January 2017

 A nationwide housing shortfall has expanded far beyond expectations, a new report says, as many people are priced out of the home ownership dream.

And the assessment for the next two decades is bleak as an exploding population is projected to outpace property development in a massive housing crunch that requires a "substantial" government response, the report says.

Commissioned by the federal government, the National Housing Supply Council's report says the supply gap for housing reached 178,400 homes by June 2009 - an increase from 99,500 at the same time last year.

An additional 180,000 homes need to be built every year for the next 20 years just to keep up with population growth.

The growing shortfall has likely resulted in more families having to share a single dwelling and students being forced to stay at home for longer periods, says council chairman Owen Donald.

The problem stretches back to 2005 when the population started skyrocketing but the housing supply remained static.

"There is a very, very substantial increase in population. It's just simply unmatched on the production side of the housing market," Mr Owen said at the report's release on Tuesday.

"It defies the laws of economics. It's not what should be happening in any well-run marketplace, but it's certainly what's happening in Australia and we need to understand a whole lot better why."

The housing crunch will hit major cities the hardest, with Brisbane and southeast Queensland accounting for 21 per cent of growth.

Melbourne is projected to face a 19 per cent increase in additional housing demand while Sydney sits at 16 per cent.

"Even if the market responds to excess demand by increasing supply over time, it is unlikely to provide sufficient housing for people whose incomes are towards the bottom of the household income distribution,"
the report says.

"Therefore, a substantial part of the response to this gap needs to lie with government policy."

The report also flags problems with infill development as a major obstacle to overcome in dealing with the housing crisis.

Such projects have high costs for a developer and people have proven to be more interested in buying a brand-new detached home on a city's fringe for less money than to pay more for a smaller flat closer to the city.

But greenfield developments have their own problems, taking six to 15 years to come to market, and requiring a major investment in public transport.

Federal Housing Minister Tanya Plibersek said the report "pulls no punches" and will be discussed within government.

She urged state governments to continue developing strategic city plans and for all levels of government to work together to develop long-term solutions

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