Home Prices – Page 6 – Digital Finance Analytics (DFA) Blog

Peddling The Housing Supply Myth: Again…

Housing is in crisis in Australia, its too expensive and relative to population there is not enough of it. As I discuss with independent Journalist Tarric Brooker last week, though shockingly, we have built more homes per 100,000 people than Canada, The US and the UK. In other words, we have a greater proportion of our economy dedicated already to housing construction, with perhaps 1.35 million people working in the sector. And we also know completion times are blowing out now, thanks to poor supply chains, lack of available labour, and poor-quality construction. In NSW half of high-rise projects have severe defects.

But the Government wants to push the supply-side levers some more, as exemplified in their Attachment to the budget papers: Statement 4, Meeting Australia’s Housing Challenge from the Treasury.

It starts out “Australia has a housing shortage. There are not enough homes being built in the right areas to meet the needs of our communities. This statement focuses on the reasons for the current undersupply of housing, how it affects affordability, and the changes required to more quickly unlock supply to meet the housing needs of all Australians. It also sets out how the Government’s policy responds to these drivers of undersupply”.

This undersupply they say accounts for the increases in rents, mortgage repayments and house prices.

Talk of course is cheap, but will this translate into real actions? And what about the elephant in the room because of course, the focus should be to curtail migration from is very high current levels, and bring demand back closer to long term averages, and over the budget period both sides of politics have to a degree been talking about this, though, as I discussed in my recent show The Migration Question Amplified; But Not Tackled… By Anyone!, it’s a battle of announcables, with numbers being banded about.

But my take is that neither side of politics are really wanting to take this on seriously, despite the direct link to higher inflation. The net result will be higher inflation for longer, requiring higher interest rates than otherwise needed.

Its Edwin’s Monday Evening Property Rant!

In this weeks Rant Edwin and I discuss the fallout from the budget, the latest developments in non-approved extensions, and trends from the WeChat Chatters and Silent Tigers as Australian property is still used to launder money.

You can also join Edwin and I for a live show on Tuesday 21st May at 8pm Sydney as we discuss how to prepare your property for sale. You can ask a question live: https://youtu.be/38o1E_69o3c

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

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The “Tapping Super For Home Purchase” Conundrum!

Housing affordability is shot, as we have been discussing, thanks to demand stoked by high migration, higher lending multiples as the financial system was deregulation, and higher interest rates mirroring the RBA’s battel to tame inflation. As a result first time buyers are delaying their purchase by several years, and more borrowers are leveraged up to the gills, despite first home grant schemes, and shared equity schemes, which as the Productivity Commission showed did help a few get into the market, but lifted prices for everyone else, so did not help structurally.

Australians are already among the highest carriers of household debt in the world. In fact, according to Domain’s 2024 First Home Buyer Report, an entry-price home in Melbourne costs $678,000. In Sydney, it jumps to $927,250. Looking outside the two major cities reduces the cost to $545,000. To be lucky enough to secure any of these options, a 20 per cent deposit will set you back between $109,000 and $185,000.

So where do prospective buyers get that sort of cash? Well some might be able to get help from the Family Bank, as I showed recently, the average is more than $106,000 now, great if you have wealthy parents. Others may be able to save, but it’s a long road, and whilst interest rates are higher than they have been for some time on deposits, it will take years, and longer still if rates are cut later. Then of course there is the old chestnut, use accumulated super.

This week we got a draft report from the parliamentary committee chaired by prominent superannuation critic Andrew Bragg which has upped the ante on the Coalition’s super for housing policy, suggesting first home buyers should be able to withdraw all their retirement savings to buy a house or use it as collateral to help borrow.

My view is that this is actually a proxy political war on the purpose and nature of superannuation, rather than a real honest discussion about how to fix the broken property market. It is in essence a mixture of misdirection – look over there, not here, and avoid the more critical issues of migration control and increased and better-quality supply of affordable housing. Or in other words, it’s a case of fiddling while Rome burns, again.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.