The Northern Rivers Times
November 16, 2023
40 REAL ESTATE
One in ten homes must be affordable to end homelessness Everybody’s Home Everybody’s Home is calling for one in ten homes to be social housing over the next decade as a measure to end homelessness in Australia. The national housing campaign has recommended the 10 per cent target in its submission on the National Housing and Homelessness Plan, which is expected to be released next year. Spokesperson Maiy Azize said about four per cent of Australia’s total housing stock is social housing. “The proportion of social housing in
Australia has been falling off a cliff for years all while rents, housing stress and homelessness have shot up,” Ms Azize said. “Renting has never been less affordable.
The number of available rentals has hit an all time low. Housing stress has become the fastest growing cause of homelessness. “The federal government’s
National Housing and Homelessness Plan must have a goal to end homelessness for good. To end homelessness, Australia needs one in ten homes to be social housing - homes that
remain affordable for the people who need them most, when and where they need them. “The private market simply won’t deliver the affordable homes that the nation requires. We need
one million public and community homes over the next 20 years to meet soaring demand. “The federal government has the power to end homelessness in Australia. Our federal leaders must deliver an ambitious national plan and back it with the required commitment and resources. “More social housing is key but the plan must also address the drivers of homelessness, set national minimum rental standards, reform Commonwealth Rent Assistance, and outline mechanisms to reduce speculative investment and house price inflation.”
Effect of Rising Interest Rates on Australia’s Property Market Recovery The recent interest rate hike, coupled with the potential for another increase in the near future, has raised concerns about the impact on Australia’s property market. While experts acknowledge that these rate hikes will slow down the property market’s rebound, they do not anticipate a complete halt to further price increases. The decision to raise the cash rate to 4.35% on Tuesday has been challenging for homeowners who have already witnessed a significant rise in mortgage repayments
over the past 18 months. This move was largely expected due to higherthan-expected inflation in the September quarter, compelling the Reserve Bank of Australia (RBA) to act in order to bring inflation back within its 2-3% target range. RBA Governor Michele Bullock’s recent statements had indicated the bank’s low tolerance for allowing persistently high inflation, emphasizing the need to address the issue promptly. Despite concerns about the impact of higher interest rates on homebuyers’ borrowing capacities,
economists believe that several other powerful factors continue to drive the surge in home prices across Australia’s capital cities. Economist Eleanor Creagh from PropTrack points to factors such as record levels of net overseas migration, limited housing supply, and a construction slowdown. These factors, combined with interest rate hikes, have not been enough to deter the gains in home prices. She believes that while the latest rate increase may slow down the pace of home price growth, it is unlikely to prevent further increases. Strong population growth, tight rental markets, and a housing shortage are contributing to rising prices. The PropTrack Home Price Index reveals that home prices have already risen by 4.93% this year, and NAB predicts a further 5% increase next year, even with expectations of another rate hike in February. NAB’s chief economist, Alan Oster, believes that the RBA may consider further rate adjustments to address inflation risks. While there are signs
that price growth is slowing, indicated by an increase in listings and auction volumes, economists like Mr. Oster expect that prices will not rise as rapidly in 2024 as they did this year. He believes that softening price growth is a result of the increased supply and may continue. Shane Oliver, the chief economist at AMP Capital, highlights the impact of the latest interest rate hike, which is expected to reduce borrowing capacities by about 2%. He also notes that the risk of another
rate hike could keep buyer demand subdued, further slowing price growth. However, this slowing trend in price growth can benefit buyers, particularly in a market where prices have reached record highs in cities like Sydney, Brisbane, Perth, and Adelaide. While some experts anticipate another rate hike in December, many believe a February rate hike is more likely as it will allow the RBA to review the next round of quarterly inflation data. Luci Ellis, former RBA assistant governor and
Westpac chief economist, emphasizes that the RBA will closely monitor data, including inflation, unemployment, and economic conditions, before deciding on further rate adjustments. However, CBA and NAB have differing expectations on the timing of a rate cut, with CBA expecting one in September next year and NAB predicting a cut in November. The consensus is that the RBA will continue to assess data and respond as necessary to maintain economic stability.
