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Australian population and census: Housing shortage will remain 'largely unchanged' warn ANZ

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Category: The Australian Economy

Published on Wednesday, 27 June 2012 11:52

Written by Will Peters

"A lack of housing supply remains the key driver of housing affordability" - Paul Braddick at ANZ.

The recently released Australian 2011 Census of Population and Housing saw the ABS reduce their June 2011 resident population estimate by 294,000 people from 22.618 million to 22.324 million.

Such a recalculation could see housing supply and demand forecasts rejigged; not so at ANZ.

Paul Braddick at ANZ says:



"We initially thought the reduction in estimated resident population (ERP) would significantly lower our estimates of the underlying demand for housing and bring down measures of the existing housing shortage.

"However, closer analysis of the Census results and methodology suggest that our estimates of annual underlying housing demand and the housing shortage will be largely unchanged."

The ABS Census of Population and Housing contains a wealth of information on dwelling, household and population numbers, size and structure which are key inputs into measures used to determine Australian housing market balance methodology.

It has now been shown that estimates have significantly overstated Australia’s population growth over the 5 years since the previous Census in 2006.

But, much of the revision is attributable to a new methodology1 applied by the ABS to account for the under-enumeration of Census responses.

"The application of this new methodology in Census 2011 effectively means while the level of the census population estimates have been improved, the 2011 Census population results are not directly comparable with earlier census data. The relationship between variables within each census is internally consistent but the 2011 ERP levels cannot be directly compared with earlier information," says Braddick.

So, while estimated population levels have been reduced, Australian population growth remains broadly unchanged.

Braddick warns of a pent-up housing demand in Australia:

"As a result our estimates suggest Australia still faces an unprecedented level of pent-up housing demand. The shortage of housing is clearly evident in tight rental markets where upward pressure on rents is intensifying.

"A lack of housing supply remains the key driver of housing affordability concerns and a re-acceleration of population growth combined with ongoing falls in new dwelling approvals foreshadows a marked deterioration in the housing market balance in the years ahead."