Trending: Australia's Housing Crisis is likely to get worse in the coming years

Australia's housing crisis continues to worsen, as per the latest report of the National Housing Finance and Investment Corporation (NHFIC) released on April 3.

Australia's housing crisis continues to worsen, as per the latest report of the National Housing Finance and Investment Corporation (NHFIC) released on April 3. The report highlights the decline in the supply of houses and apartments, which has been caused by an increase in bank interest rates, reduced housing supply and construction delays. The NHFIC predicts a sharp decline in the number of new houses that will be put on the market in the years to come, with only 127,500 units expected to be available in the financial year 2024-2025 compared to 148,500 in 2022-2023.

The shortage of housing and rental apartments is expected to be felt drastically in the medium term, with only 57,000 new apartments projected to be added each year within the next five years. This number is 40% lower than the average of the pre-2020 period, with about 377,600 households in need of housing or experiencing rental pressure and 46,500 households without housing according to NHFIC estimates.

Trending: Australia's Housing Crisis is likely to get worse in the coming years

Furthermore, the report highlights the construction industry's significant challenges such as labor and material supply constraints, construction costs, long construction times, and opposition from residential communities. The situation is expected to get worse due to rising interest rates, worsening weather conditions, lack of serviced land, and additional factors.

The report also shows that rental growth in big cities like Melbourne and Sydney is outstripping rental growth in other parts of New South Wales and Victoria. This implies that people are returning to major cities since many jobs are concentrated in these areas, following the COVID-19 pandemic's challenging three-year period.

To address the issue, the Australian government is proposing the Housing Australia Future Fund bill, which shows that AUD 10 billion (over $6 billion) will be infused into an investment fund, from which the profit will be used to build 40,000 new social houses at reasonable prices within five years from 2024. NHFIC will take charge of project implementation and will be renamed Housing Australia.

The housing crisis is a significant challenge in Australia, and the report indicates that it will continue to worsen with time. Nevertheless, the proposed bill and government intervention in the housing market may offer some hope to the millions of households affected by the housing crisis.