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Federal Budget delivers a plan for our growing cities but falls short on housing

The Urban Development Institute of Australia’s (UDIA)’s 11th Annual State of the Land flagship report has been released today at the UDIA National Congress on the Gold Coast. The State of the Land report is a comprehensive annual overview of Australia’s capital city new home markets.

Harnessing exclusive data from Research 4 and CoreLogic, the report foreshadows an imminent cliff-fall in future supply, which could serve to compound the current capital city housing affordability crisis.

The residential land development industry faced a challenging 2018 due to a ‘perfect storm’, which included weak buyer sentiment, a retreat of investors, and tightened credit conditions in the wake of the Hayne Royal Commission.

Key findings:

There is a longstanding relationship between house prices and variables relating to dwelling stock, population growth and lending, which must be effectively managed to avoid a disorderly correction.

“New lending for dwellings is down over 20% for the same period, the largest decline in a decade,” said UDIA National President Darren Cooper.

“This rapid drop off puts the industry at risk, which contributes $202.9 billion to the economy annually and supports the employment of more than 1.43 million workers, further putting their livelihoods at risk.”

Mr Cooper said that such a significant cooling of the market will lead to greater supply problems and shortages in the medium term. The coinciding contraction and abandonment of projects places the market in a position where it will struggle to meet underlying demand moving forward.

“With market dynamics different between the capital cities, housing supply relationships and solutions are complex and require a coordinated government and industry response,” said Mr Cooper.

“We call on all political parties to make the provision of housing, underpinned by appropriate and timely infrastructure a key priority.”

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