Published : 6 April 2016
A major rethink on housing in Australia could be prompted by the Australian Population Research Institute’s latest report, Sydney and Melbourne’s Housing Affordability Crisis.
The report states that, over the last few years, "there has been a speculative boom in housing prices in Sydney and Melbourne that has worsened the affordability crisis. Most of the huge increase in investor purchases has been in established houses. Investors are in effect transforming potential owner occupiers into renters".
Mortgage Choice chief executive officer John Flavell says the report is "mostly accurate”.
“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," he 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.
“I would strongly agree that more needs to be done from a state planning perspective to ensure the right type of properties are being built.
“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.
“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.”