How unaffordable housing is helping to balance supply and demand
As young Australians delay buying homes, property undersupply is shrinking, new research shows.
ANZ’s newest Economic Insight – Australia report has said that unaffordable housing is causing young Australians to buy homes later in life, which has reduced the current demand for property, the Australian Financial Review has reported.
Census 2016 data shows that Australians aged 20-34 are forming households later in life. This trend means that the overall demand for housing fell to 21,000 dwellings this year, eliminating the 117,000 home shortages that would exist if households formed earlier.
The ANZ report found that the trend towards delaying property purchases has cut the housing shortage in NSW from 40,000 to 7,000, and has cut undersupply in Victoria from 48,000 to 10,000 dwellings
ANZ put the trend down to affordability constraints in Sydney and Melbourne, which it said “artificially lowers the demand for housing”. Due to these affordability constraints, ANZ said that the outlook for first home buyers was “not encouraging”.
“It's difficult to envisage Australia's supply-side response suddenly boosting the availability of affordable housing, so it looks like home ownership will remain a challenge for 20-34 year olds,” the bank said.