A record-breaking recovery in home building is under way and will continue tilting the Australian lifestyle towards apartment living, according to a leading industry analyst and economic forecaster.
BIS Shrapnel’s Building in Australia 2014-2029 report stated dwelling building activity will reach a new high in terms of homes constructed, and more of those new homes will continue to be in apartment towers.
BIS Shrapnel associate director Dr Kim Hawtrey said new housing starts are forecast to reach 190,000 nationwide in 2014/2015, which will surpass the previous peak of around 187,000 set back in the 1994 boom.
“In the next two years we’ll also see the recent emphasis on high-rise units continue,” she said.
“Currently, two high-rise apartments are being built for every five detached houses, which is double the historical rate of one apartment for every five houses built.”
In the company’s latest forecasts, pent-up demand from recent strong population growth, coupled with the lowest interest rates in 50 years, is generating a record-breaking home building outlook for 2014/2015 that will maintain its momentum into 2015/2016.
“Home building has been punching below its weight for about a decade, and has not kept pace with population growth for some time now,” Dr Hawtrey said.
Based on BIS Shrapnel assumptions about household formation per thousand head of population, the Building in Australia report estimates the national dwelling stock deficiency is currently around 100,000 dwellings.
”We estimate that it will take the next five years to eliminate the unmet demand for housing. We therefore do not see this housing shortfall closing until 2018,” Dr Hawtrey added.