Australian housing market “Far from thriving”

Australian housing market “Far from thriving”

By: Nfinity Financials0 comments

According to NHSAC reports, whilst the problem is about limited supply, other contributing variables such as an increase in migration, interest rates, deteriorating consumer confidence, and cost inflation have made the situation “more acute”.

Our expert and market researcher Parag Dixit says: “Australian housing market is far from healthy”. 

According to him, an unhealthy market has periods of rampant price growth, unable to match enough supply to meet demand”. Australia’s over-reliance on an unsupported private market to provide the majority of its housing demands leads to scarcity and an inability to match the wide range of housing options available with the vast expanse of demand.

According to the research, there has been a decline in the affordability of housing over the past year, with the decline being “widespread” across states, territories, cities, income levels, age groups, and tenure types.

According to the report, mortgage interest rates increased by 125 basis points on average in 2023, resulting in an average mortgage of $624,000. It calculated that after the Reserve Bank of Australia (RBA) started raising rates in May 2022, the minimum planned repayments for borrowers had climbed by “as much as 60%.”

According to RBA 9 goals of Australia to achieve a better housing system. Those goals are:

  1. To guarantee secure, functional, and reasonably priced housing for households with varying income levels and geographic distributions,
  2. Equitable access to homeownership, or alternate tenure arrangements with equivalent advantages,
  3. Renters’ decent and safe dwelling that provides investors with a healthy return,
  4. Ensuring the availability of new, strategically positioned dwellings to accommodate Australia’s expanding population and foster a thriving economy,
  5. Distribution and exchange of the current housing supply in an efficient manner,
  6. The inventory of housing should be energy- and environmentally-efficient,
  7. Enough social and inexpensive housing needs to be available,
  8. Making sure that encounters with homelessness are uncommon, transient, and non-recurrence,
  9. Ensuring the accomplishment of the housing-related goals outlined in the National Agreement on Closing the Gap.

Chief economist for the Housing Industry Association (HIA), commented on the findings and stated that the government’s target of building 1.2 million houses by 2029 is “essential to lessen the inequality occurring across the housing system.

According to the NHSAC, a 50 basis point drop in borrowing rates would increase 54,000 houses in net supply, whilst a 50 basis point rise would cause a 45,000 fall in net supply.

We hope the government’s independent housing watchdog, the RBA, takes note of this warning, says our expert. For more read our related article, Book a consultation call at 1300 GET LOAN to understand your options.

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