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Housing Affordability: is it getting better?
Thursday, April 29, 2010It’s taken 5 interest rate rises and the end of the first home owner grant (FHOG) to slow down what can only be described as a super hot property market.
According to recent figures, the median house price for the March quarter rose 3%. In spite of such positive growth, this equates to a drop of 2% from the previous quarter. Accordingly, economists predict the property market will begin to slow this year.
Although this may sound like positive news to many wanting to break into the property market, a government advisory body recently reported that Australia has close to 200,000 more prospective home buyers than available properties, with Queensland and Western Australia most affected. Economists predict the housing shortage will soar to 640,000 prospective buyers by 2029 if concerted efforts aren’t made to improve the planning and building sectors.
As always, the biggest losers are the low-income earners who are consistently excluded from the property market as a result of the ever increasing property prices. Hence, even if efforts to improve planning and construction were made to correct for the shortfall, low income earners would still fall to the bottom and would most likely require government intervention.
Happy Savings!
Dave Kaplan
March 18, 2010
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