The next Government elections in Australia will be decided on housing.
It is the biggest challenge facing our country today and one Governments don’t know how to solve.
The Northern Territory will go to the polls in August next year, followed by the ACT and Queensland in October.
The Federal Government, Tasmania and Western Australia will go to the polls 6 and 12 months after that.
These Governments have roughly one year to find a solution to creating more housing supply.
The equation is simple. We have 100,000 less houses today than we need.
According to our Government, the population will grow by 435,000 people per annum over the next 5 years.
Two thirds of that population growth will be in the form of migrants, who are primarily individuals and couples.
As such, we will need one new house for every two new people coming into the country.
435,000 divided by 2 equals 217,000.
We need to build 217,000 houses per year over the next 5 years. The Government is saying that might not even be enough.
In the last 10 years, we built an average of 192,000 new houses. In the last 20 years we have built 217,000 houses in a year just once. Today, we are only building 175,000 per year.
History suggests we won’t keep up with the new arrivals, let alone make up the 100,000 current shortfall.
The solution is density and it’s only a matter of time before all Governments realise this.
The ACT has clued on, as I wrote of a few weeks ago, achieving a head start on all other Governments after trialling and failing other solutions, such as rent controls.
Infrastructure is expensive, takes time to build, and ultimately takes labour and supplies away from the private sector who build most of our housing.
Therefore, we need to build more houses in and around the existing infrastructure
There are so many 400m2 blocks of land near our CBD’s, train stations, universities and hospitals that could house three or four houses instead of the one they do now.
It’s back to the future in many ways. The average size of a block of land 100 years ago was less than 200m2. These blocks still exist in places like Paddington in Sydney, Richmond in Melbourne, and Unley in Adelaide.
Investors will play a vital role in delivering this necessary housing in the next 10 years.
If you have 2,000m2 of land with 5 houses on it, expect to have the opportunity – and obligation – to convert that holding into 10 or more houses. This presents a massive opportunity to grow your income streams from five to ten.
More importantly, a critical solution when it comes to providing much needed housing.
