AUSTRALIA'S housing undersupply is at risk of becoming an entrenched economic and social problem, according to BIS Shrapnel senior economist Jason Anderson.
Strong migration was pushing up demand for housing while rising interest rates and tight bank lending criteria were capping the amount of new residential construction, Mr Anderson said.
"It is hard to see housing starts pushing above 160,000 this year, while migration has exploded," Mr Anderson said.
Net migration increased from 215,000 in 2008 to 285,000 last year and was expected to be about 230,000 this year, he noted.
"We (economists) had all revised our 2010 figures down further, expecting that higher unemployment figures would halt increasing migration," Mr Anderson said.
"While loans for housing construction bounced back in the latest figures for November, they were driven by owner-occupiers with loans for apartments and other medium- or high-density dwelling favoured by investors still one-third lower than two years ago."
The flat housing construction will put increasing pressure on rents.
Researcher Australian Property Monitors earlier last week forecast rent rises of up to 11 per cent this year after stable rents last year.
BIS Shrapnel forecasts steady rises in housing prices over the next two years, despite a pause early this year after the scaling back of the first-home owners boost grant in December.
House prices were expected to rise 5.5 per cent in Sydney this year, 11.8 per cent in Melbourne, 4.4 per cent in Brisbane, 3.2 per cent in Adelaide and 5.2 per cent in Perth, the forecaster said.
Mr Anderson said the impact would be felt hardest by lower income earners and workers such as nurses, tradespeople, service workers, labourers and cleaners trying to find accommodation in the tougher housing market.
