The CEO of Mortgage Choice
has backed a recent report by The Australian Population Research Institute which warns “a time of reckoning” approaches if Australia’s housing affordability crisis is not properly addressed.
“In the report by The Australian Population Research Institute, it was suggested that while property demand is strong, the supply coming onto the market isn’t the right type,” Mortgage Choice chief executive John Flavell said.
“An increasing number of high rise apartments are being constructed in the capital cities, and while this type of property is needed, the report suggests that there is only a limited market for this type of dwelling. As such, we could see an oversupply of apartments in the near future.”
Flavell is urging that more needs to be done from a state planning perspective to ensure the right type of properties are being built, particularly in regards to transport.
“In Australia, we are wedded to the idea of the family home being three bedrooms and several bathrooms all sitting on its own block of land. For supply to keep pace with demand, what we need to see is a huge influx of three bedroom homes with their own backyard.
“Of course, we cannot manufacture more open space in the inner city suburbs. As such, any houses currently being built are constructed on the outer fringes – far from the city and where public transport linkages aren’t great.
“Our transportation systems do not provide quick and easy access to jobs and services in the city. If the issue of housing affordability is to be properly addressed, the government needs to take a more consistent and efficient approach to planning and investment in infrastructure. Rail links in particular need to be given special attention so that people can easily access jobs and services.”
However, unlike the report’s doomsday prediction of plummeting house prices, Flavell says it is unlikely to result in a widespread market collapse.
“But while I agree with the report in so far as I believe the right type of supply isn’t being built, I do not agree that property prices will collapse as a result.
“If we were going to see a massive slump in house prices, not only would we need everybody to sell their properties at the same time, but we would need to see a significant oversupply of properties. I do not expect this to happen.”