The dismal condition of the housing sector does not seem to have any hope of reviving in the near future. There is almost a six percent drop in the new housing projects. The constructions of new homes have come to an almost stand still phase and one will see people bidding at auctions to rent a house.
There has been steady increase in the population growth of the country. To house this growing population enough accommodation is required. It is not just the growing population; there is also a larger scale migration to many parts of the country due to better resource development which has in turn given rise to new job opportunities.
This has created a major shortage of houses almost to the tune of forty five thousand. The drop of six percent in new housing is a big figure. The house affordability has touched a dangerous level according to Chris Lamont of The Housing Industry Association (HIA).
The present scenario is such that when there is an affordable housing estate with two or three house on rent one can see that there are almost twenty five to thirty people queued up outside the place. This then becomes a bidding war for the house among these people.
The highest bid decides the rate of the property. Many a times this rate is not affordable by the person who has bid the rate. He makes the bid as he might be in desperate need for the housing.
In New South Wales the Housing Industry Association has forecast a shortage of almost eighteen thousand homes this fiscal year. There seems to be no activity in the new housing sector. The New South Wales outlook report for the June quarter has projected that project of new housing will be below the thirty thousand mark.
The activity in new housing projects is almost at a stand still. For the past six year this new housing industry has failed to recover according to Graham Wolfe, who is an executive director at the Housing Industry Association.
In a time when there is a great demand for new houses construction in this sector is lagging far behind. This has in turn created a situation of a great pressure on the rental market. The demand on the rental has led a spiral increase in the rent of houses. The high demand has made the rent much tighter.
In Queensland there will a shortage of almost twenty percent this year in the new housing sector. No new constructions are being done. According to the outlook report for the June quarter, there will be a shortage of almost eleven thousand homes this financial year all across the state.
It is not easy for the market to recover from such a slump. It will take much time for it to recover says Warwick Temby, executive director of the Queensland branch of the Housing Industry Association. May be things will improve from the second quarter of 2009. That is if there is some interest rate fall. The fall in the rate of the interest rate can create a marginally increase in the activity in the housing sector. She says that the population growth in Queensland will be a major factor for rise in housing activity in the state as they all need place to stay and the houses are in short supply.
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