Monday, February 10, 2025

Tag: Housing Affordability

Australia’s housing crisis is “only going to get worse”

REA Group’s Economist Anne Flaherty warned that Australia’s housing crisis is “only going to get worse” as demand from strong immigration continues to far outrun housing construction.

“Over August we did see approvals increase by 7%. But compared to 12 months earlier they were actually down over 20%”, Flaherty told Sky News Business Editor Ross Greenwood.

“This is really problematic if you think about the fact that our population is growing so rapidly”.

“We know that over the 12 months to March, our population increased by 563,000 people. So, unless approvals pick up the issues, we’re seeing with undersupply at the moment are only going to get worse”.

“Unfortunately, building approvals are your best-case scenario of how many homes are going to be developed. Because the reality is that just because a property is approved for development does not mean it is going to get off the ground”.

Read the full article at macrobusiness.com.au

Australian Households On Six-Figure Incomes Can Now Only Afford 13% Of Homes

New report shows housing affordability has reached its lowest levels in decades as market continues to rebound

Rising interest rates and surging home prices have seen Australian housing affordability crash to its lowest levels in decades, according to a new report.

A household earning the median income of $105,000 can now only comfortably afford 13% of homes on the market, the lowest share since the relevant data was first collected in 1995, according to property data company PropTrack.

Three years ago, the median income household could afford almost 40% of homes – which includes houses and units – for sale.

Australian Housing Crisis: Nation to fall more than 60,000 short of target in first year: HIA

Australia is on track to fall more than 60,000 new homes short of the 240,000 total needed in the first year of an ambitious new housing affordability crisis-busting program.

And a leading economist has warned to get the numbers up state governments will need to encourage foreign investors, reconsider property taxes and slash planning timelines.

The Housing Industry Association’s National Outlook released today forecasts just 178,839 new apartments, townhouses, units and houses will be built next year.

In 2025 the projections suggest only 195,105 homes will be added to the nation’s housing supply.

Read the original article at news.com.au

Michael Pascoe: “I’ve Found the Missing Housing – Half a Century’s Worth”

You know all the handwringing about the housing crisis, the claims that “it’s complicated” and that “there’s no silver bullet” and the broad resignation of not having a solution?

Well, I’ve found the missing housing and know what the real solution is – if any government cares.

We’ve arrived at the present housing disaster rather like the Hemingway character explaining how he went bankrupt: “Two ways. Gradually and then suddenly.”

The “gradual” part of the crisis started half a century ago when governments began to withdraw from providing public housing.

That gradual withdrawal turned into a speedy exit since the turn of the century, finally disastrously exploding under the cover of COVID as the nation found itself with a critical shortage of accommodation and an unsustainable model of housing prices forever dramatically rising.

Read the original article at TND

Aussie House Prices Shift Onto Slow Track

It is commonly stated that it takes seven to ten years for property values to double.

However, according to analysis from PropTrack, the typical Australia took 15.4 years to double in value through May 2023.

PropTrack director economic research Cameron Kusher also noted that macroprudential regulations such as serviceability buffers have also reduced access to finance in recent years while keeping price growth in check.

“Rising interest rates and much higher prices, along with other economic and demographic factors, will weigh on the prospects of prices
doubling in the future”.

Kusher is right: Australian home values should rise at a much slower rate over the coming decade and beyond.

One-In-Six Australians Live In Apartments & Townhouses

  • A new report found up to 26% of Australians could be living in strata-titled properties
  • There has been a 7% growth of strata-titled properties in the last two years
  • This reflects both government policies and people’s current preferences

At least one in six Australians are living in strata titled properties such as apartments and townhouses and there’s been a 7% growth in the number of properties in the last two years, according to a new report from the University of New South Wales.

Professor Hazel Easthope, who led the research project team at UNSW, says both Australia and New Zealand have seen rapid growth in strata-titled dwellings in the last two years.

She adds strata-title property ownership began in Australia in the 1960s and has since become an important feature of the housing landscape across Australia.

Young Aussie Calls Out Major Housing Myth Spread By Baby Boomers

A young influencer is challenging baby boomers who suggest ‘lazy young people sipping lattes’ could buy a house like they did 40 years ago.

Jack Toohey has made A video breaking down the differences between buying a home in 1983 and 2023.

Baby boomers are often fond of reminding the young how they paid 18 per cent interest rates in the 1980s, but they fail to mention that typical house price compared with average incomes were significantly cheaper when they bought four decades ago.

Toohey has demolished their misleading claims and misinformation with facts and figures comparing real estate values and earnings.

Housing Affordability Is Deteriorating and There’s No End In Sight

The latest decision of the RBA to increase the cash rate by 0.25 basis points will further elevate mortgage stress and reduce borrowing capacity for homebuyers across the country.

Released today by the Bankwest Curtin Economics Centre at Curtin University, the ‘Housing Affordability in Western Australia 2023: Building for the future’ report has revealed the alarming extent to which housing affordability in WA has deteriorated in the last two years.

Private sector rents in WA increased by around 13% in the last year alone and rising interest rates have inflated mortgage payments for existing homeowners. Rising house prices, lower borrowing capacity and increased mortgage repayments have negatively affected prospective buyers.

The report shows that the mortgage delinquency rate has more than tripled for new homeowners who took out loans in 2022 compared to those with earlier loan vintages.

What Killed the Housing Construction Industry?

Data from the Australian Bureau of Statistics shows that the backlog of residential construction work has blown out to a record $53 billion.

The value of house building work that is yet to be done has risen to $22.8 billion, while the value of apartment construction work in the pipeline has topped $30.7 billion.

Meanwhile, ASIC data shows that nearly 1500 construction companies have shut down since 30 June, putting the year on pace to be the worst in at least ten years.

Earlier this week, the National Housing Finance & Investment Corporation (NHFIC) released its State of the Nation’s Housing report, which forecasts that demand will exceed supply by 124,100 dwellings over the five years to 2028 amid record net overseas migration..

Australia Faces Three Housing Crises — What Are They?

A new whitepaper finds that interest rates are not the primary driver of the movement in house prices.

The ongoing housing challenges in Australia are comprised of related but separate crises, according to the latest whitepaper from PEXA Research and LongView.

Putting into perspective the drivers of house prices based on decades worth of data, the whitepaper identified three related housing crises currently happening in Australia: purchase affordability, rental affordability, and rental experience.

PEXA CEO Glenn King said containing the analysis of the housing crisis to just supply-demand arguments would only yield simple solutions that, he believes, would not be enough to work.

“What we have sought to do to is forensically analyse Australia’s unique demographic and urbanisation profile to help explain Australia’s upward trend in house prices over so many decades,” he said.

Continue reading the findings of the whitepaper at yourmortgage.com.au.