Westpac: Housing shortage will get worse

Australia's severe housing shortage will only get worse in the coming years, Westpac has predicted.

A study by the bank, obtained by the Herald Sun, noted that while Australia's population growth has almost doubled over the past decade, the country is building almost the same number of new homes a year.

"With the population boom continuing and particularly strong growth among key first-home buyer age groups, there is significant upside to future housing demand," commented Westpac chief economist Bill Evans.

"Meanwhile, rising interest rates will put a dampener on new construction. Westpac estimates that the shortage, which is already around 200,000 dwellings, could rise to 250,000 dwellings by mid-decade."

Elsewhere, the report forecast that housing affordability will improve over the next two years thanks to wages growth and "broadly steady" property prices facilitated by higher interest rates and tighter credit.

Aussies aiming to secure a property and get the best deals can choose to compare home loans in search of the most affordable options. According to recent Australian Property Monitors figures, the third quarter of 2010 saw national house prices grow by only 0.1 per cent.

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