HIA has announced that the tripling of the First Home Owners Grant for new housing is essential not only to support employment and economic growth but also to help meet the serious undersupply of housing in Australia.
The National Housing Supply Council report, released earlier this month, highlights the massive shortage in housing across the country and quantifies the gap between supply and demand from would-be home owners and renters. The report estimates the gap to be 85,000 dwellings as of June 2008 and expects it to grow to 203,000 by 2013.
Chris Lamont, HIA's chief executive, believes that pessimistic projections on house prices have failed to understand the economic principle that the price for any good will increase when demand exceeds supply. "Unless more incentives and assistance are provided to increase the supply of housing, we will again see a rapid increase in house prices in the not too distant future," he said.
