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Housing Affordability Deteriorating as Earnings Flatline & House Prices Increase posted on the 13th November 2015
Staff Writer
http://www.architectureanddesign.com.au
5 November 2015
Sluggish earnings growth and the strong pace of dwelling price increase in the two key markets of Sydney and Melbourne is causing deterioration of housing affordability.
That’s according to the Housing Industry Association (HIA) whose recently-released HIA Affordability Index for the September 2015 quarter shows that home purchasing is moving beyond the reach of a greater number of Australian families.
According to the report, housing affordability during the September 2015 quarter worsened by 4.0 per cent compared to the previous quarter and was 2.1 per cent less favourable than the same time last year. Affordability of developments in the eight capital cities also suffered a 4.1 per cent deterioration compared to the previous quarter, and was 3.6 per cent less favourable than a year ago. However, affordability actually improved in six of the fourteen markets included in the report.
Observing that affordability was now at its least favourable since the final quarter of 2014, HIA Senior Economist Shane Garrett said the two interest rate reductions in the first half of this year provided a temporary respite from the perspective of affordability. However, the surge in dwelling prices in Sydney and Melbourne, along with near stagnant earnings growth means that housing affordability continues to be impacted.
The commencement of over 210,000 new dwellings during the 2014/15 financial year has created a remarkable pipeline of supply, providing some relief to affordability pains. However, Garrett believes there is still a long way to go before more affordable housing can be achieved.
The burden of taxation on new housing combined with chronic shortages of new residential land in key markets is impeding any progress towards the goal of affordable housing. He added that the unilateral increase in variable mortgage rates over the past month has further aggravated the situation.
Housing affordability is a big issue across the board and one of the ways Ipswich City Council has answered this is by allowing granny flats to be built for others than immediate family members.
Here at Ipswich Granny Flats we have found that roughly 1 in 4 granny flats that we build are for immediate family members! More and more families are deciding that living and sharing the same property might not be such a bad idea after all. The kids and their family live in the main house with grandma and grandpa living in the newly built granny flat in the backyard – what a great thing!
A Great Solution – brought to you by Ipswich Granny Flats, the largest supplier of granny flats in Ipswich, Logan, Brisbane and SE Queensland.