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It will take at least 18 months for this to resolve and it is one of the biggest challenges in meeting housing targets - even if there was the money to build 1.2 million homes over the next five years, there isn’t the construction industry capacity to get them out of the ground.
The ability to get more homes built is particularly bleak at the moment. This cycle, it isn’t planning that is so much the challenge. In addition to the big problems in the construction industry, there isn’t the capital to fund new developments - there is no giant pot of money waiting around to build all the new homes required.
Foreign investment is very low and we won’t be able to rely on this in the same way we were last decade. Build-to-rent is still in its infancy and is only being built by a small number of developers, Governments at both a state and federal level are sitting on record levels of debt with a lot of construction funding being channelled into infrastructure projects. For owner-occupiers and investors, it is generally cheaper to buy an established home, rather than build a new one and this will force up pricing until it matches construction costs.
