Treasury forecast Australia's population at 36 million by 2050
Treasury forecast Australia's population at 36 million by 2050
That means Australia needs to build around 200,000 homes a year, but the annual rate of home construction is now just 150,000
The official cash rate set by the Reserve Bank is at the historic low of 2.75% and data shows lower rates are helping to lift activity, but it is nowhere near enough and the gap is widening each year.
Sydney University's chair of urban and regional planning, Peter Phibbs says low-income households are the real losers
Around 45% of all tax revenue now comes from property, and non-stamp duty property taxes have been growing at 10% pa since 2002. Australia has 'chronic housing problem'
According to the Organisation for Economic Cooperation and Development (OECD), transaction costs make up nearly 14% and also points out that housing investment has been flat for the best part of a decade
We obviously need to build more homes to restore affordability, so the people who are investing in brand new homes now are definitely going to be the winners in the long term
Henry Ergas, professor of infrastructure economics at the University of Wollongong, says local and state governments are price gouging developers to build infrastructure. "I don't think it's unreasonable for government, where they're going to build infrastructure that is specific to a particular area, to be clear about the costs that involves," Mr Ergas said.
It is not surprising that home ownership has been falling since the 1970s, and the deterioration is most significant in the 25 to 34-year-old age group, and some want governments to step in and provide incentives to builders for low-cost housing, to free up supply further up the price chain.
The big winners are the investors who own rental homes as there are a huge number of Australians that simply can not afford to buy their own home so the rental market is getting stronger by the day and considering approximately 70% of a properties value is paid for by the tenant of the rental property.
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