Availability of Housing
Housing is unavailable for everyone that needs it because we have not been building enough new homes is the most popular housing crisis narrative. The typical argument is that new-build supply has consistently failed to meet the rate of projected household formation and increasing new housing supply to this rate or above is widely seen as the solution. Building new homes is essential to making housing available for everyone that needs it and new supply has been increasing in recent years (chart below). However, the lack of new homes is only part of the problem for many local markets. New homes only account for around 10-12% of all residential transactions and so the second-hand market tends to provide most of the available housing supply at any given time.
The dependence on existing housing stock for most housing transactions means that the low turnover of existing homes is a big problem for many areas. This is particularly the case where housing is unevenly distributed. Housing can be unevenly distributed in terms of space and location. For example, many older households have more space than they regularly need while younger larger households squeeze into homes that are too small for their needs. Meanwhile some areas with strong demographic demand may not have enough homes while other areas with weak demographic demand may have too many homes. Understanding how the availability of homes varies across local markets is essential to ensuring new supply is most effective. Ideally, it should also be cross-referenced against plans for economic growth and infrastructure improvements.