real estate South Coast Property Specialists (Carlene Franzen) Tips #1088: Is Housing Affordability an Election Issue? With a federal election due in the next 3 months, both the Real Estate Institute of Australia (REIA) and Housing Industry Association (HIA) have put out media releases highlighting the increasing issue of housing affordability in Australia. The REIA’s most recent Housing Affordability report identified that housing affordability again declined over the December (2021) quarter. The proportion of income required to meet loan repayments has increased to 37% which was a quarterly increase of 0.7% and an annual increase of 3.9%. Other important statistics for the last 12 months were: The number of first home buyers decreased by 18.3%, and The average loan size increased to $590,482, an increase of 17.7% It appears very much that the first home buyers have been squeezed out of the market by the massive increase in property values that we have reported on in our previous “tips”. The increase in loan repayments, combined with the huge increase we are currently seeing for fuel (which will soon flow through to the prices of goods and services) will put additional pressure on the cost of living. This will give the Reserve Bank of Australia a dilemma about when to increase interest rates, particularly if we don’t see a significant increase in wages. Meanwhile the HIA has undertaken research that suggests that 75% of Australians believe everyday Australians should be able to own their own home. The vast majority of those who don’t currently own their own home aspire to do so, but only 42% of these households feel they will ever achieve this. HIA managing director Graham Wolfe says, “We know that a person who owns a home has a sense of stability and security in their life and that translates to a more stable and productive society.” As a result, the HIA has been advocating to have a minister for housing elevated into cabinet, which it argues would give the issue of housing the prominence it deserves. The have also come up with nine imperatives that they want to see the major parties embrace coming into the election period: Make housing supply a priority Unlock land supply to support new housing (ed. hopefully not in flood zones) Support home ownership Increase access to rental housing Grow the supply of social and community housing Form a population strategy to build Australia’s future Maintain a stable industry workforce Maintain the rights of independent contractors Reduce the burden on new housing Realistically, Housing Affordability in itself probably won’t be a front runner in the minds of the voting public, but its input into the cost of living equation, may just elevate this issue in this election more so than previous elections. beagle weekly : Vol 251 March 18th 2022
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