A little bit of history: since 2003, national dwelling commencement numbers have either decreased or remained stable every year except for 2010 when a 15 per cent increase was recorded (152,000 commencements). In 2003 there were approximately 163,000 residential dwelling commencements compared to 132,000 in 2009. The increase in 2010 was attributed to the government stimulus package introduced following the fallout from the Global Financial Crisis.
But one year of growth does not result in supply levels surpassing on even stabilising demand levels. According to the National Housing Supply Council, the estimated supply gap is approximately 178,000 dwellings nationally.
It is likely that the current global financial uncertainty will contribute to set demand levels to widen further in 2012. Another year of declining supply levels will add further pressure to the residential market, ensuring vacancy rates will remain tight, and that rents continue on an upwards trajectory.
From the house affordability perspective, the trends also point to an increase in rental demand in our state. South Australia has the second lowest average income in the nation on average; however payments going toward home loans in SA ($292 per week avg. or 33% of the family income) are on par with repayment levels in QLD, WA and ACT despite average family incomes being at least 27% below the level in these states.
Recent numbers show rental incomes across the nation has remained fairly consistent over the years compared to the volatile movements in the sale market. However with a growing population and many first home buyers being priced out of the market, only time will tell if this trend will hold true.
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