5/8/20151 housing australians : the challenges ahead shane goodwin managing director housing...
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Housing Australians :The Challenges Ahead
Shane GoodwinManaging Director
Housing Industry Association
1 July 2010
John Curtin Institute of Public Policy
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“In respect to ageing, between now and 2050, people aged 65 to 84 years will more than double and the number of people aged 85 and over will more than quadruple. By
2050, there will be only 2.7 people of working age for every person aged 65 and over. Today there is five.”
Wayne Swan, Treasurer
Changing Demographic Profile
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Australian Population Projections
Percentage of total population 2010 2050 - Low 2050 - Base0-14 19.1 15.1 17.215-64 67.4 58.9 60.265-84 11.7 20.0 17.685 and over 1.8 6.0 5.1Low = popn. growth of 0.8% p.a.Base = popn. growth of 1.2% p.a.
2050Low and Base case
Source: Treasury projections
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1 Whittlesea (C) - North VIC 484,029 18.3
2 Wyndham (C) - South VIC 283,717 12.8
3 Griffin-Mango Hill QLD 149,930 12.8
4 Cardinia (S) - Pakenham VIC 241,553 10.0
5 Melton (S) - East VIC 285,195 9.5
6 Wanneroo (C) - North-East WA 163,165 8.6
7 Wanneroo (C) - North-West WA 205,488 8.6
8 Wyndham (C) - West VIC 112,474 7.9
9 Condon-Rasmussen-Bohle Basin QLD 145,866 7.9
10 Central Pine West QLD 114,463 7.8
11 Canada Bay (A) - Concord NSW 111,469 7.4
12 Ipswich (C) - East QLD 260,177 7.3
13 Wyndham (C) - North VIC 368,605 6.9
14 Casey (C) - Cranbourne VIC 333,762 6.4
15 Melton (S) Bal VIC 161,328 6.1
16 Hume (C) - Craigieburn VIC 187,488 5.9
17 Onkaparinga (C) - South Coast SA 117,129 5.6
18 Brisbane City - Inner QLD 149,069 5.5
19 Melbourne (C) - S'bank-D'lands VIC 335,165 5.3
20 Caloundra South QLD 121,760 5.1
*SLAs with in excess of $100 million in residential building work approved in 2008/09 and with an annual population growth rate in excess of the national average
Statistical Local Area State / TerritoryResidential Building Approved,
2008/09 ($'000)
Annual Population
Growth Rate (%)
National top 20 Building & Population Hotspots*
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1 Wanneroo (C) - North-West Perth 205,488 8.6
2 Wanneroo (C) - North-East Perth 163,165 8.6
3 Mandurah (C) South West 188,511 5.1
4 Port Hedland (T) Pilbara 138,002 4.9
5 Armadale (C) Perth 251,948 4.6
6 Cockburn (C) Perth 255,129 4.5
7 Busselton (S) South West 142,604 4.3
8 Swan (C) Perth 241,569 4.1
9 Rockingham (C) Perth 242,543 4.1
10 Gosnells (C) Perth 172,573 3.1
11 Stirling (C) - Coastal Perth 233,484 2.7
12 Stirling (C) - Central Perth 218,341 2.6
13 Cambridge (T) Perth 115,795 2.4
14 Canning (C) Perth 113,397 2.4
Statistical Local Area Statistical Divison Residential Building Approved, 2008/09, ($'000)Annual Population
Growth Rate (%)
**SLAs with in excess of $100 million in residential building work approved in 2008/09 and with an annual population growth rate in excess of the national average
WA Building & Population Hotspots**
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Acknowledgement : Bernard Salt - Address to HIA National Policy Congress, Gold Coast, May 2010
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0
50000
100000
150000
200000
250000
300000
350000
400000
450000
500000
Sep-
89
Sep-
90
Sep-
91
Sep-
92
Sep-
93
Sep-
94
Sep-
95
Sep-
96
Sep-
97
Sep-
98
Sep-
99
Sep-
00
Sep-
01
Sep-
02
Sep-
03
Sep-
04
Sep-
05
Sep-
06
Sep-
07
Sep-
08
Sep-
09
Australia's Population Growth by Component - Moving Annual TotalSource: ABS
Total MAT Natural Increase MAT Net Overseas Migration MAT
Australian Population Growth
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Dwelling Requirements
0
50,000
100,000
150,000
200,000
250,000
300,000
Current projections Small Australia Big Australia Current trend
New Dwelling Requirements to 2020
Average annual starts required Housing Starts based on current trend
Source: HIA
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Dwelling Requirements
1,920,000 1,819,8112,059,811
2,419,811
0
250,000
500,000
750,000
1,000,000
1,250,000
1,500,000
1,750,000
2,000,000
2,250,000
2,500,000
2,750,000
Current projections Small Australia Big Australia Current trend
Total Dwelling Requirements to 2020
Total new dwellings required Current Capacity Potential Capacity
Source: ABS,HIA
Current Trend
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0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Current projections Natural growth Big Australia Current trend
Num
ber
Average annual shortfall in Housing Starts
Average annual shortage
Source: HIA
Housing Shortfall
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150,000
160,000
170,000
180,000
190,000
200,000
210,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Num
ber
Dwelling Requirements versus Industry Capacity
Dwelling requirement Potential Capacity
Capacity with modest improvement on supply side Current Capacity
Source: HIA
Housing Shortfall
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Housing Affordability Decline
50.0
75.0
100.0
125.0
150.0
175.0
200.0
225.0
250.0
275.0
300.0
Mar
-88
Mar
-89
Mar
-90
Mar
-91
Mar
-92
Mar
-93
Mar
-94
Mar
-95
Mar
-96
Mar
-97
Mar
-98
Mar
-99
Mar
-00
Mar
-01
Mar
-02
Mar
-03
Mar
-04
Mar
-05
Mar
-06
Mar
-07
Mar
-08
Mar
-09
Mar
-10
Housing Affordability in AustraliaSource: HIA Affordability Report
Australia Capital Cities Rest of State
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160,000
165,000
170,000
175,000
180,000
185,000
190,000
195,000
200,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Num
ber
How Many Homes can People Afford to Build?
Dwelling requirement Actual (affordable) demand
Source: HIA
Housing Shortfall
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2.69 2.68 2.672.65
2.62
2.58
2.53 2.532.51
2.56
2.40
2.45
2.50
2.55
2.60
2.65
2.70
2.75
1994
–95
1995
–96
1996
–97
1997
–98
1999
–00
2000
–01
2002
–03
2003
–04
2005
–06
2007
–08
Num
ber o
f per
sons
Average number of persons in household - AustraliaSource: ABS 4130.0
Average number of persons in household
Average number of persons in household - Australia
Source: ABS4130.0
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Obstacles to boosting supply
Systemic obstacles to boosting Australia’s supply ofhousing stock:
Lack of readily available land
Planning delays
Infrastructure tax and charges
Finance constraints
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State Planning & Building processes for Detached Housing Approvals (1 May 2010)
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1990 2000 2010 1990 2000 2010 1990 2000 2010Land $50,000 $75,000 $160,000 $46,000 $64,000 $130,000 $49,000 $74,000 $150,000House $80,000 $145,000 $259,000 $85,000 $153,232 $242,000 $75,000 $132,791 $263,000Levies and Charges* $5,000 $19,000 $110,000 $1,900 $7,080 $27,000 $1,500 $4,522 $41,550*Infrastructure charges, local government regulations, compliance costs. Excludes stamp dutySource: HIA
Sydney Melbourne Brisbane
House and Land Package Examples
House and Land
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House and Land
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Capping of Levies in NSW
Pre December 2008 December 2008 to June 2010 After 7 June 2010Local Council (s94) $58,970 $58,970 $20,000State Infrastructure Up to $33,000 $11,000 $11,000Water Charges $18,000 $0 $0
Total $109,970 $69,970 $31,000
Notes:
1. No exemptions existed prior to December 2008
2. The state Infrastructure Charge (SIC) of $33,000 was reduced to $11,000 in the December 2008 announcement. (HIA is currentlylobbying to retain this cap beyond July 2011.)
3. The water charge was also removed in the December 2008 announcement
4. The majority of councils in the SW growth area were granted an exemption to the December 2008 ($20,000) cap
Example of Reduction in Section 94 Charges
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20Source : 2005 Australian Infrastructure, Report Card, Institution of Engineers Australia
Infrastructure Backlogs
Significant infrastructure investment backlogs (2005):
Electricity has an under-investment of $1.15 billion
Gas has an under-investment of $2.6 billion
Road has an under-investment of $10 billion
Rail has an under-investment of $8.06 billion
Water has a potential under-investment of $3 billion
The total estimated under-investment is $24.81 billion
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5.0
12.0
25.0
27.8
19.9
10.3
0
5
10
15
20
25
30
15-19 20-24 25-34 35-44 45-54 Over 55
Ag
e
Age Profile of the Workforce: Construction IndustrySource: HIA
Workforce Profile
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Trade & Non-Trade Commencements
Seasonally adjusted, 1999-2009 (‘000)
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Dec 1999 Dec 2000 Dec 2001 Dec 2002 Dec 2003 Dec 2004 Dec 2005 Dec 2006 Dec 2007 Dec 2008 Dec 2009
Nu
mbe
r ('0
00)
Trade Non-trade
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Apprentice Commencements Commencements
Qtr Year Year total 31 Mar 2005 7,400 30 June 2005 3,300 30 Sept 2005 4,200 31 Dec 2005 3,400 2005 18,267 31 Mar 2006 7,500 30 June 2006 3,500 30 Sept 2006 4,200 31 Dec 2006 4,200 2006 19,392 31 Mar 2007 8,400 30 June 2007 4,400 30 Sept 2007 5,200 31 Dec 2007 4,500 2007 22,460 31 Mar 2008 9,700 30 June 2008 4,800 30 Sept 2008 4,300 31 Dec 2008 3,500 2008 22,276 31 March 2009 6,300 30 June 2009 3,300 30 Sept 2009 3,400 31 Dec 2009 5,780 2009 18,877 I
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3.0
8.7
15.1
25.4
39.7
46.949.2
0.0
10.0
20.0
30.0
40.0
50.0
60.0
1 month 3 months 6 months 1 year 2 years 3 years More than 3 years
Pe
rce
nt (
%)
Time Frame
Apprentice and Trainee Attrition rates from Contracts, by Occupation(sub-major groups) and times of withdrawal, 2003 commencing cohort
Source: NCVER
Apprentice and Trainee Attrition Rates from Contracts, by Occupation
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Commonwealth Skilled Occupation List
Skills Shortages 1 July 2010 Air-conditioning mechanic Architect Bricklayer Carpenter Carpenter & Joiner Construction project manager Drainer Electrician Fibrous plasterer Gasfitter Geotechnical engineer
Glazier Joiner Painter Plumber Project builder Quantity surveyor Roof plumber Solid plasterer Stonemason Structural engineer Wall & floor tiler
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Summary of Commonwealth Incentive Payments for Apprentices in Building Industry
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Summary of State Incentive Payments for Apprentices in Building Industry
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