Economists are calling on the federal government to resolve the growing housing shortage problem.
The Housing Industry Association’s chief economist Harley Dale said housing starts are expected to drop by 15 per cent in 2011, wiping out a majority of the short-lived, stimulus driven gains of last year.
“The fate of residential building in 2011 has been all but sealed by higher interest rates, continuing tight credit conditions, and a complete lack of progress on policy reform to reduce excessive new housing costs,” Mr Dale said.
"Housing starts have only increased in two of the last ten years. This fact delivers a very poor scorecard on new home and rental market affordability which especially hurts aspiring first home buyers and lower income households.
“The housing supply crisis is upon us now and without proper leadership from the federal government it is only going to escalate.”
Mr Dale said it was now up to the federal government to not impose any new taxes that have an impact on the cost of new housing.
In addition, Mr Dale said the government would be well placed to resume concrete action to reform the supply side of Australia’s housing market, including assisting states to remove stamp duties on new homes and removing planning and development bottlenecks.