Already a subscriber?The first round of submissions for grants from the federal government’s Housing Affordability Future Fund, a key part of the federal government’s ambitious plan to build 1.2 million new homes in the next five years, quietly closed on Friday.
“I wouldn’t say you need an economic miracle, but you’re going to need something pretty interesting to happen to reach that 1.2 million over the five years,” Oxford’s head of infrastructure construction, Adrian Hart, told the firm’s Melbourne conference this week., which predicted just 79,000 new homes would be finished in 2026, a drop of 26 per cent compared with last year.
The lack of supply feeds through to Oxford’s forecast for house prices, which it expects will rise 2.4 per cent in 2024. But senior economist Maree Kilroy says the prospect of interest rate cuts will boost affordability in 2025 and 2026, when she expects national house prices to rise between 7 per cent and 8 per cent. Rental growth is expected to remain above the rate of inflation until 2026.