Latest news with #TimReardon
News.com.au
23-05-2025
- Business
- News.com.au
HIA: Australia forecast to miss 1.2 million new homes construction target
Australia is forecast to miss its housing-crisis busting 1.2 million new homes construction target by almost a year, and will not hit annual goals any time in the next decade. The country is also tipped to be building the same number of units as houses each year from 2030 onwards, as housing shortages and population growth force prices up, likely ushering in rising interest rates again within the next five years and forcing a downsize to the great Australian dream for many. New figures from the Housing Industry Association show the nation's lacklustre home building numbers are likely to have bottomed out last year with growth ahead in 2025. But annual totals will top out at almost 213,000 in 2028, and begin to fall again a year later. In 2030 the nation is expected to build 210,000 homes, and about the same number all the way through to 2035. The National Housing Accord has set a target of 240,000 homes to be built each year by 2029 in order to add 1.2 million new residences to Australia's housing supply and address the country's housing affordability crisis. The latest figures from HIA show just 986,000 will have commenced before the deadline, and only 945,000 are expected to be completed. It is just above the 936,000 forecast from the National Housing Supply and Affordability Council earlier this week. HIA chief economist Tim Reardon said consistently missing the 240,000 a year target would force more unit and apartment builds, but it was also feasible Aussies would start gravitating to relatively affordable cities — especially those with downturn-resilient employment industries, like Adelaide, which is becoming a unicorn capital. Mr Reardon said this would be at the expense of more mature capitals including Brisbane, Melbourne and Sydney. The economist said that after 2030 their data had a number of assumptions built into it, including thousands of apartments they have manually added to Queensland's projections to reflect a home boom expected in the lead up to the 2032 Olympics. However, the key forecast of a post-2029 decline was centred on the price of homes rising alongside population, which was also likely to cause future interest rate hikes. To give a sense of the scale of the building crisis ahead, the economist pointed to population projections released by the Victorian government in their state budget this week, which showed Melbourne would have to build enough homes to house the population of Adelaide, about 1.5 million people, over the next five years. 'And the housing shortage becomes more acute until we exceed that rate of home building at 240,000 homes a year in a sustained way,' Mr Reardon said. Key solutions for governments to get more homes built centred on reviewing the tax regime around housing construction and purchases, he said. HIA are also forecasting 'robust' numbers of renovations as Australians who already have a home opt to avoid paying additional stamp duty costs by extending their homes and updating them to fit changing needs, rather than relocating. Metricon chief executive Brad Duggan said houses would lead the initial recovery from recently weak figures. 'But we are seeing appetite for townhouses increasing with our customers and that aligns with how developers are cutting up blocks,' Mr Duggan said. 'In South Australia we are seeing significant demand for townhouses in the market.' However, he said the big driver for how development progressed from here would be on land release. In areas like Victoria where governments are pushing for more high-density housing, the boss of the nation's biggest home builder said it was probable stand alone houses would have a cap on their construction that could limit overall success in reaching construction goals. 'But customer confidence has moved in the past two months and there's been a lot more activity going into deposits to build homes,' Mr Duggan said. South Australia and regional Victoria had recorded the biggest moves, with the boost reflecting interet rate reductions.
Daily Mail
21-05-2025
- Business
- Daily Mail
Why first-time homeowners need to 'get in before the crowd' and buy now
Hopeful home buyers have been urged to pull the trigger now before a first home assistance scheme causes property prices to surge. From January 2026, the federal government will guarantee half the deposit on Australians' first homes, slashing the requisite from 10 per cent to five per cent. A deposit of just $50,000 would be enough to purchase a $1million home. However, industry experts warned the plan will fuel housing stress by opening the door to a flood of demand in a low-supply market. Michael Yardney from Metropole Property Strategists has predicted vendors will react to the scheme by raising house prices - making homes less affordable for future generations of entry-level buyers. 'Property prices will skyrocket in early 2026 when Labor's five per cent deposit scheme comes into effect – get in before the crowd,' he told the West Australian. 'Sure, prices seem expensive but that's what your parents said. Who wouldn't like to buy their parents' home for the price they paid.' Tim Reardon, an economist from the Housing Industry Association, also encouraged first-time buyers to buy now before the scheme takes effect. 'The housing affordability problem will get significantly worse over the next three years as we complete a low volume of homes, and population growth remains extraordinarily high,' he said. Labor's Homes for Australia Plan also promises to shore up renters' rights. The Albanese government has vowed to build 100,000 homes exclusively for first-time buyers to balance demand for property introduced by its deposit scheme. They also believe their $43billion commitment to the housing industry - eight times more than the Coalition invested in a decade - will see the construction of 1.2million homes over the next five years. But critics have repeatedly slammed Labor for slow progress on its plans. According to data released by the Australian Bureau of Statistics in April, over one million homes need to be built by 2029 to keep up with projected demand. Australia needs to build 57,000 homes per quarter between 2024 and 2029. The current rate sits about 20,000 houses below that requirement. It follows a strong period of construction during the pandemic. Experts say growth in the industry has been hampered by labour and materials shortages, which the government has promised they are addressing. Slow planning processes and approvals, and high interest rates have also hindered construction. The number of commenced and finished construction projects were down in 2024 compared to previous quarters.
News.com.au
02-05-2025
- Business
- News.com.au
Chilling reason Aussie home projects abandoned before completion
Incomplete homes have been springing onto market as hundreds of new projects signed off by Sydney councils remain stuck in limbo due to cost blowouts for builders. The unfinished homes have come up for sale after the would-be owners pulled the plug on plans to build their dream homes, or renovate, midway through construction. Some of the homes are listed for sale needing just some finishing touches applied while others are a shell of partially laid foundations. A common theme was that the build prices quoted before the jobs commenced were no longer feasible due to an explosion in the cost of materials and labour and a raft of building company bankruptcies. Housing Industry Association economist Tim Reardon said many of the Sydney projects greenlit before interest rate hikes in 2022 were on ice because developers could no longer deliver the specifications approved by council at current building costs. The trend was especially pronounced in the apartment market and Sydney was currently building far fewer unit blocks than headline approvals estimates would suggest, Mr Reardon said. 'They're faux approvals,' he said. 'Only about half the approved projects are actually going ahead … the rest will never get built under the approved plans because they are not commercially feasible.' Mr Reardon explained that, in the bulk of these cases, developers were delaying or killing projects before bulldozers ever went on site. The instances where works were abandoned once construction had already commenced were mostly across more bespoke house projects or renovations. The failed projects nonetheless pointed to 'structural problems' in the home building industry, Mr Reardon said. 'We can expect at least three years of low (building) commencements and the shortage of housing will likely get worse.' Among the incomplete homes currently up for sale is a property in western suburb Horsley Park, which is mostly just a single-level laid slab and walls. It still needs a roof and much more. The listing said a buyer is needed to 'complete the home'. The existing structure was labelled as 'approved, although not complete'. A similar property with just the foundations laid and some partially erected walls is for sale in Greenacre. It is expected to sell for about $2m-$2.5m, although no official price guide has been released. In the Sutherland Shire suburb of Oyster Bay, an unfinished home was this week listed for sale, with the auction scheduled for later this month. 'The main home is partially built in solid double brick (with) a concrete second floor base,' the listing said. No guide has been released but local sources estimated it could sell for well over $700,000. Other partially built homes or properties with an abandoned reno job were for sale in Greenwich, Belfield, Bundanoon and North Epping, among other locations. Scott Cam, the long-time host of TV renovation show The Block, said homeowners usually pulled the plug on building due to mistakes with budgeting, which was difficult to get right in the current climate. 'Materials costs have gone up enormously, building costs have climbed dramatically, and people aren't always aware of what's going on in the industry when they start. You have to be able to budget a project really well,' Mr Cam said. He added that cost blowouts in some projects were often the result of 'variations', where the owners decided to change their plans once works had already commenced. 'In the building industry, variations are one of the biggest costs to clients. If you do it, it costs money. Then (the project) goes outside the budget. If it's a couple of variations the costs can really go up … some won't have that kind of money.' REA Group economist Anne Flaherty said sluggish home price growth in some areas may have contributed to the slow rate of housing completions in some areas. 'After Covid, building costs increased at a rate beyond anything we've seen in history,' she said. 'Construction cost increases had been fairly consistent stretching back to the 1960s but there was a spike in 2021 and the combination of higher build costs and lower prices in these markets mean some projects won't be profitable anymore. 'We'd need a massive jump in prices for some of these projects (in their approved form) to be feasible again.'
