Hundreds of thousands of new properties needed in Oz, development council warns

In addition 150,000 new properties need to be built every year to keep up with demand, including a rising population, according to Caryn Kakas, executive director of the Residential Development Council.
 
‘The only way to stem the increase in home prices is to meet the backlog. That’s going to take at least five to 10 years. We’re going to continue to see price growth in the market,’ she said.
 
Property prices rose 13.6% last year as Australia failed to suffer as much as other countries in the global economic downturn and the country’s economy recovered faster. Indeed, it has prompted Reserve Bank Governor Glenn Stevens to raise the benchmark lending rate four times in the past five months.
 
New property starts totalled 97,002 in the first three quarters of 2009, statistics bureau data shows, down from 114,644 in the same period a year earlier.
 
But as well as building new homes, developers also need to look at what is needed, added Kakas. As many as 60% of new homes need to be apartments or townhouses to cater to the growing numbers of smaller and single person households, Kakas explained.
 
But lending to developers has tightened, particularly for apartment projects which are deemed to have higher risk than house and land developments.
 
Developers are now required to have pre-commitments for as many as 80% of units in a project to get funding, compared with 50% 18 months ago, Kakas added.
 
But she also warned that planning authorities and developers need to works together.
When developers approach local councils with plans for higher density projects, for example, they often face opposition and higher costs.