No Australia-wide housing shortage: CSR’s Ross Sindel

By Larry Schlesinger
Monday, 21 May 2012

Australia is not suffering from a nationwide undersupply of housing, according to Rob Sindel, chief executive of building products group CSR.

"I think that some of the forecasts that we've previously seen around 180,000 and 200,000 housing starts a year being underlying demand, I don't believe those because they were predicated on the basis of household formations, the number of people living in a house shrinking. That hasn't come to pass. We've actually seen that number start to turn the other way, " Sindel told the ABC’s Inside Business program.

“[The number of people living in a house has] started to go up after falling for a number of years,” Sindel said.

“What you've got is you've got shortages in certain places. You've got shortages in NSW, you've got shortages in south-east Queensland. You've got a shortage in Western Australia.

“You don't have a shortage in Victoria. And it's often driven by land shortages, it's driven by a number of factors. So I think it's very hard to categorise the Australian market as just one market. There is a series of undermarkets,” he says.

Sindel warns that the current dip in housing construction is looking like being a much longer affair than dips experienced during the 1990s, which he says “were six or eight months then you could see your way through the other side”.

“This time I think we had the dip, we had the stimulus, and now we've dipped again on the basis- and I think people are very fearful about what's happening in Europe and we've got a lot more information through the media.

“So people are putting off those big decisions like buying a house and so you're seeing a much, much more drawn-out recovery,” he says.

CSR estimates that total housing starts in Australia will fall to about 140,000 in the year to March 2013, down from the 148,300 in 2012.

Last week CSR reported that net profit fell to $76.3 million in the year to March 31 from $503.4 million the previous year.

Trading revenue fell to $1.8 billion from $1.9 billion.

"Excluding the global financial crisis and the introduction of the GST, this represents the lowest level of housing activity in the past 15 years," CSR said in a statement.