Housing Affordability Crisis Deepens in Australia: Experts Highlight Challenges and Solutions - Property Inc

Housing Affordability Crisis Deepens in Australia: Experts Highlight Challenges and Solutions

The Australian housing market faces a deepening affordability crisis, impacting renters, homeowners, and prospective buyers alike. Two recent articles, “Thought it was hard enough to buy a home? It just got worse” by Elizabeth Redman and “The Australian regions facing severe supply pressure” by Rhys Tarling, shed light on the severity of the situation and the potential solutions to mitigate these challenges.

Escalating Affordability Issues:

According to Elizabeth Redman, housing affordability worsened significantly in 2023. Redman cites the ANZ CoreLogic Housing Affordability Report, highlighting that a median household now requires a decade to save for a 20% deposit on a median Australian home. CoreLogic’s head of Australian research, Eliza Owen, remarks, “There’s probably more challenges than ever for first home buyers trying to get into the market” and points out the stark disparity between dwelling values and what is affordable for the average Australian.

Mortgage Burden and Rental Market Strain:

The mortgage burden has increased, with households needing to spend over 46% of their income on mortgage payments, assuming a 20% deposit. Concurrently, rising rents, up 28.4% since the pandemic’s onset, exacerbate the difficulty of saving for a home. Owen adds, “If you don’t own housing already, it’s very difficult for incomes to keep pace with the movement of values, particularly for houses.”

Supply Pressures and Policy Challenges:

Rhys Tarling’s article focuses on the severe supply pressures in various Australian regions. InvestorKit’s founder, Arjun Paliwal, identifies the root causes as rising construction costs, low planning efficiency, and unfavorable investor policies. Paliwal stresses the need for policy reforms, including rental reform, expediting land supply and planning approvals, and ending policies that discourage investors. He notes, “Investor activity has been suppressed due to unfavourable policies, higher taxes and fees, and higher interest rates for investor loans.”

Specific Areas Under Strain:

Tarling’s article highlights regions like Robina, Penrith, Brisbane’s Inner North, Barossa, and Bayswater Bassendean, where population growth has outpaced housing availability, leading to exceedingly low vacancy rates.

The combination of increased mortgage burdens, rising rents, and severe supply constraints paints a grim picture of Australia’s housing market. While experts like Owen and Paliwal propose solutions, the path to improved affordability remains challenging. As the situation evolves, the need for comprehensive policy reform and innovative approaches to housing supply and affordability becomes ever more apparent.

References:

https://www.smh.com.au/property/news/thought-it-was-hard-enough-to-buy-a-home-it-just-got-worse-20231127-p5en4e.html 

https://thepropertytribune.com.au/market-insights/the-australian-regions-facing-severe-supply-pressure/ 

Recommend0 recommendationsPublished in Property News

Related Articles

Responses