Housing shortage in Australia to get worse: economist

11:17, October 06, 2010      

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A report into Australia's housing industry on Wednesday warned of a downturn in housing supply as federal stimulus measures fade.

The Housing Industry Association's (HIA's) National Outlook said new housing are forecast to fall by 4 percent in the current financial year.

Last year's boost to the first home owner grant and lower interest rates, has helped to drive a 26 percent increase in the number of new homes built nationally.

But the HIA warned the country's housing shortage is set to get worse because not enough homes are being built to match demand.

The stimulus measures introduced by the Federal Government last year has prompted a short-term recovery in new home building and helped Australia avoid a recession.

But the HIA said the Federal Government needs to examine tax reforms, an end to excessive regulation, increased land supply, and better competition in the banking sector to promote development again.

"One of the main ones is removing stamp duty - it really is a very inefficient tax," HIA senior economist Andrew Harvey told ABC News on Wednesday.

"Also things that block land supply, and the slow planning approval process is a major problem as well."

Harvey also wants a dedicated federal ministry for housing, because policy responsibility is currently spread across different portfolios.

Source: Xinhua


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