The surge in home building came at a time when Victorian and national population growth was consolidating. Victorian population growth reached a recent peak in March 2009 with 31,089 new residents over the quarter. By June 2010, Victorian population growth had fallen by just over 66%, while at the same time housing starts increased by 50%. Conversely, now that population growth is once again ramping up, creating additional demand for housing, Victorian housing starts are winding back.
The rate of home construction in Victoria has raised the spectre of housing oversupply. However, that may not be the case.
In the June 2012 Housing Supply and Affordability – Key Indicators, the National Housing Supply Council, which operates out of the Federal Treasury, shows at the time of publication that Victoria’s housing market remained undersupplied to the tune of about 10,000 dwellings. The findings showed the level of Victorian housing undersupply had narrowed significantly since 2009, but overall there is still a cumulative shortfall in Victorian housing due to the under-building of previous years.
It’s important to note that the National Housing Supply Council research into housing supply is currently factoring in new census data and it will be interesting to see if their updated analysis will show a similar outcome to the June report.
Tim Lawless is research director for RP Data.
