Housing Affordability getting worse

The likely hood of low-income Australians ever owning their own home is now so remote that drastic measures are needed, according to Housing Minister Tanya Plibersek.

It’s now become "out of reach" for many people Ms Plibersek said.

Co-operation between the public and private sector was needed to build a national affordable housing agenda, she said. One million low-to-moderate income households were paying more than 30 per cent of their disposable incomes on housing, she said.

The figure represented an increase of 220,000 households in three years.

"The median house price is now 27 times greater than the annual income of the poorest Australians."

Australia’s population growth and lack of supply has driven prices to a level that is beyond the reach of many low income families. In 2008 year there was a predicted housing shortfall of 30,000 dwellings nationally.

The government plans to deliver 50,000 new affordable rental properties across the country in the next five years, aimed at providing housing for low-to-moderate income earners. Investors will be given incentives to provide the housing at 20 per cent below market price.

"If the scheme is successful, it will be extended to 100,000 properties over the next 10 years," Ms Plibersek said. The government also plans to introduce a Housing Affordability Fund and National Housing Supply Council.

The First Home Saver Account scheme, which would allow prospective first home buyers to save for a deposit through superannuation-style accounts, is expected to be rolled out later this year.

Investors will need to look at how this will impact them. This could have a significant effect on investment strategies depending upon the outcome.

Nicola McDougall - REIQ Media Manager - 3249 7302 or 0405 801 979