New home construction has reached record highs. This, say industry experts, may offer hope of home ownership to those struggling with home affordability.
According to recent data, first home buyer activity has been dwindling in the property market despite record low home loan lending rates. Reportedly, the biggest constraint for new home buyers has been a lack of housing affordability as property investors snap up any bargains and push-up property prices.
However, the increase in new home builds could offer new home buyers hope of home ownership as this could make Australian homes more affordable. This is attributed to the supply of homes increasing. Let’s look at these factors in greater detail.
The Building Industry
New home building across the nation has risen to record levels say the Housing Industry Association (HIA). In 2012, new building was extremely low, however figures now suggest that new home building has reached a 20-year high. This is welcoming news as Sydney’s median home price hovers around $800,000.00.
New home builds during 2013/14 reached over 180,000. This is the largest 12-month figure since 1995. The industry recorded 45,527 new housing builds in the second quarter of 2014, which was 6 .9 percent lower than the March quarter.
The overallincrease in new home builds may lead to a rise in housing affordability nationwide. This could be the news that new home buyers have been waiting for, but it may take time before this leads to more affordable housing prices.
Housing Supply Restrictions
While new builds have increased, the industry is still hampered by restrictions which often delay building. These restrictions include stamp duty, high taxation, delays in residential land availability and planning restrictions.
If restrictions are not handled, then it could mean that the housing industry will fail to deliver enough houses. This could result in a shortfall, which may add to housing affordability issues.
To keep abreast of this, new housing build figures need to be strong between now and 2050. These figures will need to be higher than existing figures in order to meet housing demands.
Do you want to know more about new builds and first home buying? If so, then contact eChoice and find the right home loan for YOU today.
Written by eChoice