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Housing Affordability Survey 2016

Discussion in 'Property Market Economics' started by 2FAST4U, 25th Jan, 2016.

  1. 2FAST4U

    2FAST4U Well-Known Member

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    'Severely unaffordable' Australian homes second only to Hong Kong

    The report acknowledges demand drivers (population growth, interest rates, capital gains tax treatment, negative gearing, first home buyer grants, easy access to credit), but believes the main culprit for high prices is lack of land supply for new housing stock. Releasing new land supply in the outer suburbs will definitely lead to lower prices in the outer suburbs. However, I don’t see how it’s going to affect inner city land prices, as there is a limit on how far people will travel to get to work etc. Lots of interesting charts etc.
     
  2. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Releasing land is only one part of freeing up the supply equation. The rest is rolling back planning laws - allowing workplace locations and facilities to decentralise, in turn shifting the focus from sole desirability in being as close to the CBD as possible.
     
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  3. wogitalia

    wogitalia Well-Known Member

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    Releasing land is not the solution, our cities are already massive wastes of space, Perth is 3x the size of the Tokyo Metro area, which houses 13.5m to our 2m.

    We quite simply don't have the infrastructure to support more sprawl.

    Our cities need a massive increase in urban density, there needs to be much more infill so we can build the infrastructure to support more people at costs that are reasonable BUT none of that matters if we don't start changing the entire perspective of housing in this country, the "Australian Dream" has been used to push the sprawl and house prices for decades now and we have to start to encourage apartment living if we're going to sustain the growth in cities, there needs to be an attitude change that sees people wanting to live in apartments instead of buying 50km from the CBD and expecting the same facilities as the city.

    Whether we can achieve that is a totally different question, you look at a place like Perth and the general consensus is a "gross oversupply" of apartments when if you compare Perth to other 1st world cities you'd actually turn up a gross undersupply but of course with the perception to apartment living the first one is actually closer on a demand basis.

    It's a many faceted problem that is probably going to take a generation to even start to fix.
     
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  4. Perthguy

    Perthguy Well-Known Member

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    True, but Perth is not nearly as "unaffordable" as Sydney or Melbourne, which were "blamed" in the article for pushing up housing 'unaffordability'.

    Surging house prices in Sydney and Melbourne have helped keep Australia near the top of an annual list of the world's least affordable countries.
    What is the median in Perth now, half that of Sydney? Simple solution for people in Sydney and Melbourne who find housing unaffordable - move to Perth :p
     
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  5. wogitalia

    wogitalia Well-Known Member

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    Haha that's fair!

    I just use Perth because I know that stat off the top of my head. Sydney though is 10x the size of New York with about half the population if you want another comparison using our driver of unaffordability over east ;)
     
  6. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    How does Australian cities compare against 'like' cities in terms of demographics, culture and facilities - say Houston? (keeping in mind that most other countries don't designate 'city' limits the same as Australia)

    Personally I can't say I'd be too keen on Australia pushing density to the level of places like Tokyo. 'Sprawl' isn't an issue if employment is decentralised, so commutes, public transport and asset prices become a non issue.
     
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  7. Bullion Baron

    Bullion Baron Well-Known Member

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    Sprawl is an issue for public transport. Density is what makes public transport viable in cities. And the same goes for many other shared services / infrastructure. Sprawl would result in these services being a lot more expensive to build / run or be of inferior quality.
     
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  8. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Under the assumption that we want more heavily subsidised mass transit. ;)

    There's a planning school of thought which is focussed more on allowing facilities to be decentralised to the point where public transport becomes only a transport type for those who do not have private means, rather than continually piling on more bandaids onto the real problem. Obviously this is outside of the whole 'sustainability' debate.
     
  9. Bullion Baron

    Bullion Baron Well-Known Member

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    Certainly not calling for increased government spending, just highlighting that density does have it's benefits when it comes to centralised services.

    I expect that in the next couple of decades, driverless cars could potentially replace a lot of public transport.
     
  10. peastman

    peastman Well-Known Member

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    Ahh, the media.

    "Surging house prices in Sydney and Melbourne have helped keep Australia near the top of an annual list of the world's least affordable countries." says the ABC.

    When in fact the survey only covers 6 countries. There are more than 6 countries in the world, but the ABC seems to have forgotten that. Regions ignored include Russia, South America, most of Asia, Middle East, Africa, Europe, in fact most of the world.

    For some reason the survey looks at 337 regions, of which 51 are in Australia, a vast over representation if based on population, not really sure what implications that has though.

    The full report can be read here if you are interested.
    http://www.demographia.com/dhi.pdf
     
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  11. Tyler Durden

    Tyler Durden Well-Known Member

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    Not to mention being inequitable without a broad-based land tax to pay for all that extra infrastructure.
     
  12. wogitalia

    wogitalia Well-Known Member

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    That's an alternative option but Australia has gone down an entirely different path to really allow such decentralisation without even more significant costs than the current sprawl already dictates.

    Using Perth again as an example... North to South of the Perth greater metro area is the same distance as New York to Philadelphia.

    We've built heavily centralised cities and are sprawling all around them because of our general disdain for apartments and urban development. The result is an infrastructure nightmare. Building apartments without considering the attitudes towards them is going to be a very slow process.

    Australian cities are some of the very worst in the world when it comes to public transport and alternative transport methods to cars, largely because the sprawling style makes things like bike networks about as unwieldy as an effective train network is. You go to cities all over the world and come back wondering how we have it so wrong on those areas (you appreciate other things like the safety

    I don't disagree that the decentralisation method that is pretty massive in US is an alternative to increasing the density in inner suburbs but it's a far more difficult one and I'm not sure we really have the population to support it, take New York and Philadelphia, just their city centres, not metro areas, are nearly half of Australia's population, Sydney is not a large city by any international standard on a population basis, on more normal international density levels you should be able to fit just about Australia's entire population in the area of Sydney to consider how "spread" it really is.

    I also agree we don't really want Japan where people live in shoeboxes, there is a nice balance but at some point the cities need to make a choice on one of those paths, we can't keep sprawling while slowly infilling, either you commit to an urbanisation of the cities and develop the infill and infrastructure with it or you need to start creating genuine regions to decentralise.

    Either way, we need to commit to an approach and start working towards it, having situations like Sydney where wealth creates such a disparity in lifestyle is a recipe for disaster. You've got people spending 4 hours a day to get to work, a whole generation who can't afford a decent house. It's a genuine concern.
     
  13. barnes

    barnes Well-Known Member

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    All those regions have no price comparison to Australia, except a few European countries like Switzerland or Asian place called Hong Kong. Most of the world is pretty cheap compared to Australia. And it's good, if it wasn't so, we would have had a lot more people over here that could buy local real estate at large.
     
  14. Drizzt Do'urden

    Drizzt Do'urden Member

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    I have nothing against increasing density, but apartments in their current form are just not the answer. They are too small and lack enough storage. If I was to shift into an apartment, I'd like it to be around 3 bedrooms, plus study, with lots of storage. A small second living area would be nice too. So you're probably talking ~20 squares in size. 2 car parks would be required as well. I don't even want to think about what that would cost currently. Add to that the body corporate fees and I can understand why for the vast majority of families, apartment living doesn't work.

    If apartments can be made that are suitable and affordable for families, and not just couples or couples with 1 child, then you could really get some serious density happening. Until that happens, the standard home and townhouses will dominate. If this can't be done, then wogitalia's suggestion of "decentralising" or in layman's terms "spread the f--k out", is the better answer.