Powered by MOMENTUM MEDIA
realestatebusiness logo

Breaking news and updates daily. Subscribe to our Newsletter!

Home of the REB Top 100 Agents
Breaking news and updates daily. Subscribe to our newsletter

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Lack of housing supply to hurt affordability

By Staff Reporter
30 September 2009 | 1 minute read

The Reserve Bank of Australia (RBA) has warned that rising house prices and interest rates could have a significant effect on affordability.

Advertisement
Advertisement

Speaking at the Committee for Economic Development of Australia’s housing forum yesterday, the RBA’s Tony Richards said supply was not keeping up with the increasing level of demand driven by the surging population.

“Mortgage rates are particularly low at present and, as the bank has noted on a number of occasions, it is not reasonable to expect that interest rates will stay at the current low levels indefinitely,” he said.

“When they do rise towards more normal levels, discussions on housing affordability will again focus more on the level of housing prices relative to incomes.”

Rising rates aside, Mr Richards warned that the growing population could also dampen affordability.

The average annual population growth has jumped from 240,000 per year to 340,000 per year – an increase of around 40 per cent.

“Yet the number of dwellings we have built has not risen. Commencements of new housing over the past five years have averaged around 150,000 dwellings, versus around 155,000 over the previous five-year period.

“ It would not be surprising if this was one factor that had contributed to the increase in the cost of housing over the past decade,” Mr Richards said.

Lack of housing supply to hurt affordability
default
lawyersweekly logo

Tags:

Listen to other installment of the Real Estate Business Podcast
Do you have an industry update?

top suburbs

12 month growth
Travancore
49.78%
Timboon
49.57%
Dolphin Point
49.51%
Nyah West
49.42%
Preston Beach
49.29%
Newington
48.97%
Killcare Heights
48.89%
Wundowie
48.77%
Homebush
48.44%
Glenside
48.28%
SEE AREA REPORTS ON SMART PROPERTY INVESTMENT WEBSITE
Subscribe to Newsletter

Ensure you never miss an issue of the Real Estate Business Bulletin.
Enter your email to receive the latest real estate advice and tools to help you sell.