A lender and real estate lobby have called for public policy development that will ease pressure on housing affordability.
Findings from the latest Adelaide Bank/REIA Housing Affordability Report for the December quarter show housing affordability has dropped nationally, making it more difficult for those trying to break into the residential property market.
The data shows the proportion of family income required to meet loan repayments has increased by 1.1 percentage points to 31.5%.
“Construction of new residential dwellings may be at the highest levels for some time, which is encouraging and certainly helping to get our economy moving again,” Adelaide Bank General Manager Damian Percy said, “but unless a more determined effort is made on the part of the States and Commonwealth to work more actively with local government, developers and financiers – as the economy improves and population continues to grow at current rates, there will continue to be supply-side issues that will ultimately mean further upward pressure on house prices.
Percy said land supply is still a major problem and housing affordability is an issue that needs to be addressed to allow time for reform to counter negative longer term outcomes in other areas such as retirement savings adequacy.
“Land may be short in Melbourne and Sydney, but we should be thinking more creatively,” Percy said.
“For example, opportunities exist for airspace to be better utilised. Governments already own the land and could work with the private sector around areas such as railway stations to both improve car parking and provide construction rights with a caveat that a percentage of dwellings be set aside for essential services workers.”
Across the country, the report revealed the ACT remains the most affordable state or territory in which to buy a home or rent while the NT has the largest proportion of first home buyers in the nation’s owner occupier market
Tasmania continues to have the smallest average loan size and NSW is the only state or territory with the average loan size above the $400,000.
“The rising chorus of voices and release of studies such as the Grattan Institute’s book City Limits
this week will ensure that the affordability debate is one that exercises the minds of our policymakers for some time to come, but as an issue, we need less talk and more action at all levels of government,” Percy said.