A growing population and improving economic and social conditions have led to a rising demand for new homes and the market is set to grow at an annual rate of around 7% in nominal terms up to 2018. However, there are fears about overheating property market, finds the research.
Factors such as a strengthening economy, low unemployment, government efforts to minimise the country’s housing deficit, and a population growing 1.2% annually are the key drivers influencing the demand in residential construction market in Australia. In order to increase supply and ease concerns over the overheating property market, the Australian government aims to implement a number of residential housing projects. These include the Greater Sydney Housing & Infrastructure Programme, which aims to build 171,000 new homes across Sydney together with associated facilities.
Close to 90% of Australia’s population were living in cities in 2012. However, soaring property prices are making housing in popular central areas unaffordable. On average across the country, house prices grew by 2.6% in 2012 and 9.5% in 2013, but in Sydney they jumped by 14.3% in 2013. This has contributed to a trend of new residential projects in the outer suburbs.