Ideas about a housing shortage in Australia are a fallacy, a study has found.
Based on analysis of Census data, building approvals and household income over a fifteen-year period spanning 2001 to 2016, the Regional Housing Supply and Demand in Australia Working Paper produced by researchers at Australian National University suggests that Australia does not have a housing shortfall as often claimed by governments and industry bodies.
In fact, it says Australia has a surplus of housing to the tune of 164,000 dwellings.
According to the study, oversupply is especially prevalent in several inner-metropolitan markets.
In Queensland, for example, it found that Brisbane has a surplus of 4,537 homes or 12.7 percent of its stock whilst Surfers Paradise had a surplus of 2,878 homes or 5.3 percent of its stock.
In New South Wales and Victoria, meanwhile, significant surpluses were found in Sydney Inner City, Melbourne City, Richmond Valley – Coastal (NSW) Whittlesea/Wallan (Melbourne outer-north) and Banyule (Melbourne inner north-east).
There is also oversupply in some regional areas such as Central and Northern Queensland, regional WA and outback WA where a large number of homes were constructed in mining centres prior to the end of the resource-related construction boom.
Whilst cautioning that the surplus was not overly substantial, Associate Professor Ben Phillips said the research suggested that issues relating to housing supply in and of themselves were not the primary driver behind house price growth.
“The standard line of governments and industry seems to be that housing supply is a big problem in Australia,” Phillips said.
“No doubt there are some areas where it is. But overall we don’t see the housing shortage that’s often talked about – in fact we see that there is a surplus.”
“If this research is right, it suggests we’ve built enough dwellings, and there’s not likely to be any great gain in building more houses in addition to what’s required.”
Around Australia, significant gains in dwelling values have pushed house prices beyond what many can afford in major metropolitan areas.
Over the twelve months to June alone, capital city dwelling prices have risen by 10.2 percent.
The research did not examine alternative causes of Australia’s house price increases.
Nevertheless, Phillips suggested on ABC radio that these could include low levels of interest rates and tax concessions which apply to houses purchased for investment purposes.
According to Phillips, the study looked at several factors which are often overlooked in other research.
These include changes in household types, dwelling types and unoccupied dwellings.