Aussie Housing “Seriously Unaffordable” - Study
Tuesday, 22nd January 2013 at 11:30 am
Housing in Sydney and Melbourne is ‘seriously unaffordable’ according to an international survey of metropolitan markets in Australia, Canada, Hong Kong, Ireland, New Zealand, the United Kingdom and the United States.
The 9th Annual Demographia International Housing Affordability Survey found Australia’s five major markets continue to be severely unaffordable, reflecting vastly overpriced housing.
It says Sydney is the least affordable, followed by Melbourne, Adelaide, Perth and Brisbane.
“The United Kingdom, Australia and New Zealand continue to experience pervasive unaffordability, while the least affordable market is Hong Kong.
All of the major markets of Australia, New Zealand and Hong Kong were severely unaffordable. One-half of the major markets in Canada and the United Kingdom were severely unaffordable, while only six of the 51 major US markets were severely unaffordable .
Internationally, Sydney is the third most unaffordable housing market after Vancouver.
The Survey found that among the smaller markets, the least affordable market was Port Macquarie, followed by Coffs Harbour and the Sunshine Coast.
Outside the major metropolitan areas, the least expensive markets were Shepparton (VIC) and Mildura (VIC), both however, still described in the survey as being seriously unaffordable.
The report says that there were no affordable or moderately unaffordable markets in Australia.
This year's Survey also includes two principally resource-based markets located in the Pilbara region of Western Australia.
“Despite a large surrounding land supply of land housing is seriously unaffordable in Karratha and severely unaffordable in Port Hedland, “ the report said.
The report also coincides with another report showing that more than half of Australian first home buyers admit they are trapped in a rental rut and continue to take an overcautious approach to entering the property market despite the perceived buyers’ market.
The study by RAMS research has revealed that over two thirds of first home buyers (FHBs) surveyed find that rent is too expensive these days (71% up from 65% in quarter 3, 2012) however they are delaying purchasing a home due to concerns about the current economic situation, ability to afford repayments and fears of unemployment is on the increase.
RAMS Chief Executive, Melos Sulicich said many FHBs may be missing out on an opportunity to move from renting to homeownership due to lack of confidence to take the first step.
“The biggest barrier to buying a home is anxiety regarding the servicing of debt with 7 out 10 respondents noting this as a key concern which could explain the gap between sentiment over a buyers’ market and actual purchases,” he said.
Despite changes to Government financial assistance programs in recent times, more than a third (37.5%) say they are still reliant on Government Grants. FHBs report they are willing to sacrifice lifestyle choices (40%), live at home with their parents (20%) and ask family for help with deposits (14.9%) to get into the property market.
Australians for Affordable Housing's Joel Pringle said: “The Demographia report adds to the extensive evidence of Australia’s housing crisis. For decades, governments of all stripes have encouraged property speculation to boost the broader economy. They’ve lost control of the asset inflation, and the result is the current housing crisis.
"Governments have created this crisis, and now they have to solve it. We are calling no the federal government to provide relief in the upcoming budget by increasing Rent Assistance by around $25 per week, and by establishing an Affordable Housing Growth Fund, largely funded by an affordable housing bond scheme.”