The housing market has a good chance of returning to the average level by 2021, but will it be enough to keep pace with demand?
That depends on the state and national governments policies, according to a new report.
In the first analysis of its kind by the Australian Bureau of Statistics, the think tank has estimated that the number of new housing projects built each year will reach 5 million by 2025.
The figure is lower than a decade ago when 5.3 million new housing units were built in Australia.
But the number could be as high as 6 million by 2021 if the country’s construction industry remains strong.
It’s not a surprise that the report has drawn some scepticism.
“This is just an estimate,” said Andrew Pallas, a senior economist at the Centre for Policy Studies, which has a long-running study of Australia’s housing markets.
“[But] it is a very reasonable estimate.
There is a lot of uncertainty about how many new homes the construction industry will be able to produce, so this is really encouraging.
But it is still a bit of a long shot.”
The report also says there is a lack of consensus on how to handle the problem of rising demand.
While the numbers show that Australia’s population is growing at a rate of 4.4 per cent a year, the report notes that this is likely to increase to 6 per cent by 2060, because of the ageing of the population.
As a result, housing demand will grow slower than the national economy, leading to the construction of fewer new homes per capita than in the past.
“The construction sector’s performance in the near term will depend largely on the response to climate change and the state of the economy,” the report says.
A lot of new houses will be built in the long term, but only about half of the buildings will be homes built in 2021, 2020 and 2025.
“There are a number of assumptions we have to make to try and account for the long-term trends and the uncertainty around building growth,” said Pallas.
One of the biggest uncertainty is how to deal with the high levels of demand that are expected to come with the arrival of the 2020s.
Most of the research has shown that a large proportion of Australia is in an ageing population, with the number living in Australia reaching its highest levels in the 1990s.
That’s because the population has grown by about 12 million since the mid-1980s.
But as the population ages, more and more houses are being built to house younger people.
But some economists are sceptical about the impact of that on the construction sector.
John Howard was Australia’s prime minister from 1995 to 2003, and one of the first to see the rise in housing construction as a significant threat to the country.
Howard said at the time that building more housing would help the economy by boosting productivity and saving the government money.
“We can see that this construction boom is going to be hugely significant,” he said.
“And it’s going to benefit a lot more Australians in the short-term, because the construction boom will help keep the cost of living down.”
Howard also believed the rise of more houses would help reduce the debt that the economy was facing because it would help increase household incomes.
However, he has since acknowledged that the build up of houses in the 1980s was “not as robust as we would like it to be”.
“What’s been happening in Australia is that the construction companies have had the opportunity to invest in building lots and lots of housing, and they’ve done so, and the costs of building have risen,” he told ABC Radio in 2016.
Australia’s construction boom has been driven by the booming construction industry, and a lack in labour supply.
Over the past decade, the number and size of construction jobs has grown from 3.3 per cent of the labour force in 1991 to 11.9 per cent in 2014.
Labor has been pushing to increase the number, from around 3 per cent to around 5 per cent over the next two years.
Opposition leader Bill Shorten has previously argued that the Government is building too much too quickly.
On Tuesday, the Opposition released its own modelling that suggested the number in the construction workforce could fall to 5 per a year over the same period.
That would mean that the current boom is not sustainable, according the report.
“In the long run, we see an increase in construction demand driven by rising labour supply and productivity growth and the rise, over the longer term, of demand for more and better housing,” the paper says.
“This will result in a significant increase in house building and, therefore, housing supply over time.”
The report says that if Australia is to maintain its current level of growth in the labour market, it needs to increase its housing supply.
“With the labour pool shrinking and the housing supply