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A supply-demand disparity in the Australian housing market has left the market “inaccessible” for new entrants, according to a leading economist.
Tim Reardon, principle economist at the Housing Industry of Australia (HIA), said the 2016 census figures, released on Tuesday, present “symptoms of an under-supplied housing market”.
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He noted a rise in the number of people per dwelling in Sydney and Melbourne to 2.7 people, compared to 2.6 nationally, adding that the “housing affordability squeeze” had lead to high prices and more people per dwelling.
“These figures show that the housing market, in these cities, continues to be undersupplied and inaccessible to new entrants. Households are increasingly forced from the owner-occupier market to the rental market,” Mr Reardon commented.
He added that apartment living was on the rise and that the high cost of land was behind the phenomenon.
“Any additional constraints on the supply of housing will exacerbate this trend,” Mr Reardon said.
The percentage of households where mortgage payments are 30 per cent, or greater, of household income fell from 9.9 per cent to 7.2 per cent between 2011 and 2016. Pointing to this statistic, Mr Reardon said declining interest rates and a growing percentage of renters were contributing factors.
[Related: Fall in home-ownership not surprising, says CoreLogic]
