New analysis: housing need significantly underestimated

Analysis released today by the University of Newcastle’s Institute for Regional Futures into the national housing shortage shows that the projected supply of housing needed in Australia’s cities and regions falls significantly short of demand.

The Institute’s Director of Research Programs, Amanda Wetzel, said the current level of government resources aiming to increase housing supply was unprecedented, but the evidence upon which need is assessed was fundamentally flawed.

“Firstly, housing markets do not follow council boundaries. Markets need to reflect buyer and renter behaviours, which are based on their social connections, and where and how they work and access services,” Ms Wetzel said.

“Assessing housing need based on population projections was also flawed as they are only forward focused and do not reflect actual demand. Population projections do not account for pre-existing undersupply, which manifests as changing household formation patterns, homelessness and overcrowding. By their very nature, projections also fluctuate dramatically from one period to the next based on economic and social conditions.”

“A third issue is that rezoning land does not in and of itself deliver housing to the market. Projections take into account existing zoned land, which includes assumptions about the quantity of housing that will be generated. Without forward funding and planning for infrastructure delivery, housing will simply not be built,” Ms Wetzel said.

“The Hunter does not have a healthy housing market. By various estimations, we have land zoned to supply housing for the next 60 years, however a notable proportion lies dormant. A key reason is the lack of enabling infrastructure to deliver the housing required.

“Policy innovation is needed to ensure housing supply is fit for demand and capable of delivery. The way forward relies on broadening the evidence base, redefining housing markets, accounting for undersupply, and planning and funding infrastructure for zoned land.”

The Hunter Insight Series: Building a Healthy Housing Market draws on analysis from the Institute for Regional Futures and data from the Hunter Research Foundation Centre. More information about the Institute is available at https://www.newcastle.edu.au/research/centre/regional-futures

The Institute for Regional Futures is one of the University of Newcastle’s flagship research institutes. For decades, the Institute has partnered with governments, industries and communities providing evidence and strategy to support them to make the best decisions for their future and the future of their regions.