AUSTRALIA'S housing shortage has intensified, with bank lending to investors to build new housing in 2009 shrinking to the lowest share of new finance on record.
Despite population growth soaring to record levels - provisionally estimated at 443,000 in the year to June - data to be released next week is expected to show the number of new homes started in 2009 sank to the lowest level for 13 years.
While population growth has swollen since 2004 to twice its long-term average, the number of housing starts has remained more or less flat for the past 40 years.
The shortfall in the supply of housing, especially in inner-city areas, is one of the key reasons house prices have risen out of reach for many people.
Bureau of Statistics figures next week are expected to show Australia started building between 130,000 and 135,000 homes last year. Fewer new homes were started in 2009 than in 1969, despite the support of the government's stimulus measures.
A key reason was that banks, spooked by the financial crisis, sharply cut back the flow of finance for new commercial developments. Bureau figures show only 1.7 per cent of new home lending in 2009 went to investors building new housing, a phenomenal fall from 11.6 per cent 20 years earlier.
While the government stimulus to first home buyers boosted home building by owner-occupiers, overall just 12.2 per cent of home lending was directed to building new housing, down from 30 per cent when these statistics were first collected in the 1980s.
By contrast, 88 per cent of new home lending in 2009 went to people buying or renovating existing homes, up from 70 per cent in 1985. The bureau figures show 46 per cent went to owner-occupiers, 25 per cent to rental investors and 17 per cent to people refinancing their mortgages, usually for renovations.
Peter Jones, chief economist of Master Builders Australia, said Australia should be building 185,000 to 190,000 new homes a year, given its population growth.''The social housing initiative and the work now in the pipeline means 2010 will be a better year, but it's becoming apparent that it will be nowhere near enough,'' he said.
In mid-2008, the federal government's Housing Supply Council estimated the cumulative housing shortfall at 85,000. The deficit is thought to be far higher now.
Mr Jones blamed ''paranoia'' by the banks for the slump in new investor housing.
He said that even developers who had pre-sold 100 per cent of the units in proposed apartments had been unable to get bank finance.
But Australian Bankers Association chief executive Steven Munchenberg responded: ''Why wouldn't a bank lend to someone who presents a viable, reasonable proposition?'' He said developers who previously used other sources of finance were now looking to the banks, but often their proposals proved unattractive.
The Age