THE interest rate cuts delivered by the Reserve Bank since last September and handed on in part by financial institutions have improved housing affordability.
However, a report by the National Housing Supply Council has highlighted that this is likely to be only a temporary reprieve.
Research by the council shows that there is a significant imbalance between housing supply and demand.
The two notable consequences of this are falling housing availability and affordability.
The first is the demand-side squeezing of moderate-income households -- those who previously may have been able to buy their own home -- into private rental, and the progressive squeezing of low-income households into situations where the level of rent they are paying places them under considerable financial stress or worse, removes all options within the private rental market.
The outcome of this is greater pressure on the supply of social housing.
Strong rental yields and improving returns may draw investors into the market, which would help redress the imbalance.
However, current trends suggest that this is not happening.
