RBA tips residential construction surge
The residential property market is tipped for significant growth, with the Reserve Bank of Australia (RBA) saying that demand is outstripping supply, leading to a spike in home construction over the next few years.
RBA head of economic analysis Jonathan Kearns said demand for new residential real estate is growing across the nation while home construction lags behind, contributing to a shortfall of about 50,000 dwellings annually.
"The strong population growth in recent years and the relatively low rate of dwelling construction suggest that there is sufficient demand for housing in the economy that an increase in supply could easily be absorbed," Mr Kearns said yesterday (November 13).
But the economic expert was hesitant to say whether housing prices would increase, stating that households appear to be reluctant to take on new debt due to uncertain global conditions.
"The ratio of prices to income is high relative to its history, suggesting that it is unlikely that a large increase in prices is in prospect. So, overall it looks likely that dwelling investment will pick up at a relatively moderate rate in the medium term" he added.