Surging house prices nationwide are sparking an affordability crisis for first home buyers, a new government report has revealed.
The National Housing Financing and Investment Corporation's State of the Nation's Housing report has identified renters and first time buyers will face higher burdens due to supply constraints within the country's property market over the coming years.
Price affordability and a lack of available greenfield sites on the east coast are fueling constraint concerns up until the middle of the decade.
NHFIC is an arm of the Commonwealth which provides financial schemes to assist Australians to enter the housing market. It looks after schemes such as the First Home Loan Deposit Scheme and the Family Home Guarantee Scheme.
The report found housing unaffordability is the worst in Sydney and Hobart, with the bottom 60 per cent of income earners only able to afford 10 per cent of the current housing stock listed.
Housing affordability for ACT first home buyers has also dropped.
Data from the report shows rent payments are outpacing average mortgage repayments, with suggestions a smaller number of rental stock is available due to a number of investors selling properties to owner-occupiers.
NHFIC researcher Hugh Hartigan said dwelling approvals had risen rapidly, but flagged there were existing issues nationally with accessing land ready for development.
In some cities, it can take more than six years to get new stock to market, from site identification to development approval to completion," Mr Hartigan said.
"And in a few years time, when there's likely to be much stronger population growth, these supply impediments will have a future effect on housing supply, and we can start to see this play out in 10-year projections."
The issue of housing supply is also constrained by the existing number of greenfield sites ready for development.
"Our liaison with industry also indicates serviced and development-ready greenfield land supply remains a significant constraint in key markets, particularly areas of Sydney and South East Queensland," Mr Hartigan said.
"Land availability is a factor that could limit the ability for developers to meet future demand, particularly as population growth returns to more normal levels."
NHFIC's report suggests rents will climb higher with the return of migrants to Australia following the easing of international border restrictions.
It also indicates 1.7 million new households will be formed between 2022 and 2023, despite the country's population growth by 2031 to be 1.5 million people lower than pre-pandemic forecasts.
Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content:
Sign up for our newsletter to stay up to date.