OPINION: THE FINDINGS by the 6th annual Demographia Housing Affordability Survey clearly demonstrate that increased population does not have to equate to exorbitant increases in housing prices.
The greater demand for housing and higher density development within the urban growth boundary in conjunction with lower interest rates and incentives have no doubt attributed to increasing housing prices.
However, to have over 50% of gross income required to meet repayments for a median income household is an alarming percentage.
Whilst the concentration of development within the urban growth boundary does contain urban sprawl, there are many fringe location of Melbourne in between the residential and rural zoning of Melbourne that could be developed on more affordable land prices that utilise existing services without placing strain on inner locations infrastructure.
The green wedge locations traditionally provided a buffer between residential and rural purists, however, they are often too large for purely residential use as maintenance in terms of time and cost for large gardens is high and they are too small for most rural pursuits with the exception of intensive agricultural farming, that is, if it is even permitted.
Both the State and Federal governments have endeavoured to address the housing affordability issue with the implementation of the first home buyers grant, yet as many Australians work longer hours to endeavour to repay debt, the introduction of tax incentives that actually give incentives to people who take on extra hours or even extra jobs to try and repay home loans is worth consideration.
And, whilst the “Y generation” can understandably get despondent in the quest for the great Australian dream of owning one’s own home; expectations in some cases need to be curbed.
Few people have the luxury of starting out with a first home complete with en-suites, walk in robes, new appliances and wall to wall air-conditioning. Entering the property market is an important step and then like most things trading up can then be far more easily achieved once the initial equity is in place.
Some of the major influences on the property market are interest rates, availability of money not only from banks but from overseas investors and the basic economics’ of supply and demand. Where the property market heads in 2010 will undoubtedly be influenced by these factors.
By Justine Jacono, Vice President, Australian Property Institute (Vic).*
Australian Property Journal
