Statistics from the 2016 Census, released yesterday, underline the urgent need for action around housing affordability in Australia. Among the Census’ findings is the decline of home ownership in Australia while our population – along with house prices across our major cities – continue to swell.
Australia’s population at the end of 2016 was 24.4 million people – an addition of approximately 2 million since 2011. Critically, 90% of this total live in our major cities, with new arrivals even more prone to settling in urban areas – making our extremely urbanised country ever more so. Melbourne, Australia’s second-largest city, is already home to approximately 4.7 million people, and is expected to reach well over 5 million by 2025.
At the same time, over the past five years, Melbourne house prices have skyrocketed by $100,000. Its median house price as of March is now an incredible $844,674 – more than double what it was a decade ago – meaning one almost has to be a millionaire to afford a house in a good area.
The issue isn’t simply in buying. The proportion of households renting is up to almost a third (30%), while the average rent has increased to $350 per week, compared to $300 five years ago. The average mortgage repayment has decreased slightly – $1,800 a month, down $10 from the 2011 average (largely due to interest rates) – but remains high. It is no surprise then that many Melburnian households are now coming under housing stress, defined as having to pay more than 30% of income on mortgage or rent.
It is a concern that the extravagant costs of housing in Melbourne correspond with an ongoing decline in home ownership – once a proud milestone for Australians. The Planning Institute of Australia’s CEO David Williams says, “Now is the time for governments to look at innovative solutions to combat housing affordability. They need to work with planners and the industry to deliver more cost-effective housing for young Australians that sets Australia as a front runner in housing diversity, liveability and affordability.”
PIA is concerned at the current tendency for housing to be viewed as financial assets rather than homes, giving rise to investor demand and, with it, escalating prices. Addressing this, Mr Williams has called on the Federal Government to “seriously consider an overhaul of the Capital Gains Tax discounts and negative gearing policies to help overcome the lack of housing affordability.”
Whether renting or buying, PIA would like to see all Australians being able to access to affordable, well-located housing that is connected to work and services. Equally, housing should be of a suitable design to meet the increasingly diverse needs of our population and enable our future residents to live a healthy and sustainable lifestyle.