Why rising prices could unlock new housing supply [Video]

Home prices have surged in recent years, mortgage rates have moved higher and growth in household incomes hasn’t kept up.

As a result, housing affordability has deteriorated sharply hitting its worst level in at least three decades.

Despite the shortage of homes, the delivery of much-needed new homes has faced significant obstacles due to labour shortages, disrupted supply chains, and pandemic-related restrictions.

These challenges are compounded by a pre-existing array of difficulties, including delays in planning, limited land availability, and excessive bureaucratic processes.

These persistent delays not only slow down the building process but also contribute to higher construction costs, adding to the burden of inflation in building material prices and higher financing costs.

These challenges are contributing to the persistent housing supply deficit flowing through to both prices for existing homes and the rental market, fuelling continued upward pressure on home prices and rents.

Many are hoping that housing supply will lift to match …