I have been living in Australia for the past 7 years and I now find that the boom in immigration has a greater impact on some industries and sectors than on others. One such sector is represented by the Housing Industry Association, or HIA, for short.
1,000,000 New Homes!
Economic forecasters’ projections indicate that demand for new houses is sure to outstrip supply, largely due to increases in the number of immigrants. They estimate that more than one million new homes will be needed in the next five years to meet the demand due to current booming immigration.
Along with mushrooming immigration, additional factors which drive the growth in housing needs are:
- rising population - needs more houses
- rate of construction is below demand
- current interest rates
I read the latest news from the Housing Industry Association is that although there is sudden increase in the immigration numbers, the housing numbers ishows no sign of catching up.
With current social trends, many people - especially immigrants - prefer to live alone or at least with fewer people sharing a house. Nowadays people don’t like to be crowded in the same house and I feel that this decline in the number of people per house could also be a reason driving the need for housing - to meet the demand of a flood of immigrants.
Other factors that contribute towards the shortage in supply of housing are:
- release of land for housing is very limited
- investment funds available for housing is declining
Though demand for housing continues to rise, the supply of new houses is falling behind. There are various factors contributing to this but the primary reason is high interest rates in the property market.
Due to the recent record interest rates, there has been a greater slow down in the building of new houses. I have a house because I built it 7 years ago. Now in this current financial climate, its getting more and more difficult to think of owing even a small house.
My friend recently brought land for about $200K, then found that the estimated cost of building the house had jumped to about 300K. Since he could not afford to pay the higher prices of both land and house, the result is that the land is now vacant, without housing, and he still has high rents for accommodation, as well as paying mortgage costs.
We live in a major city in Australia and find that house prices grow rapidly day by day. Same with house rents which are on the increase. I feel it is vital that major steps must be taken towards meeting the housing demands due to increasing immigration - aimed at cutting these high prices - and would prevent people from facing a homeless future.
This also would increase the need for skilled construction workers and engineers to construct homes for meeting the needs of immigrants.
Brought to you by the Australian Immigration Experts at Synch1