SBS News, 6 May 2024:
The median rent across the nation is $627 a week, ranging from $547 in Hobart to $770 in Sydney, according to property data provider CoreLogic.
The regional median was $540, driven by rises in house rents in regional Queensland and Tasmania.
Rents are going up faster in areas between 30 and 40km from city centres, CoreLogic head of research Eliza Owen reported.
"Part of the reason for the re-acceleration in rents nationally could be due to renters being forced into more affordable, peripheral housing markets as they become priced out of more desirable and central metropolitan locations," she said.
But supply and demand pressures remain high across the nation and migration levels implied there were at least 200,000 new households in Australia, while only 173,000 new dwellings were completed to September last year, Owen said....
Median rents were more than $1,000 in nine areas, with adjoining Cottesloe-Claremont suburbs in beachside Perth the only area outside Sydney to command four figures.
Rents in Pittwater, almost 25km from the CBD on Sydney's northern beaches, were the highest at $1,335 per week, coming down half a percentage point since a peak in March.
Rents were still up 8.4 per cent annually in Pittwater, in line with the 8.5 per cent national increase.
The data comes after the National Housing Supply and Affordability Council launched its inaugural report on Friday, painting a dire portrait of Australia's housing system.....
National Housing Suppply and Affordibility Council, State of the Housing System 2024, 3 May 2024:
Forward
There is no denying the housing crisis we are in. It is a longstanding crisis, fundamentally driven by the failure to deliver enough housing of all types – from social housing through to market home ownership. At its heart, this crisis is about insufficient supply, but many contributing factors are making it more acute – the resumption of migration at pace, rising interest rates, skills shortages, elevated construction company insolvencies, weak consumer confidence and cost inflation to name just a few. These all combine to create an environment in which prices and rents are growing faster than wages, rental vacancies are near all-time lows, 169,000 households are on public housing waiting lists, 122,000 people are experiencing homelessness and projected housing supply is very low.
Australia’s housing market is far from healthy. An unhealthy market has periods of rampant price growth, is unable to produce enough supply to meet demand, is overly reliant on an unsupported private market to address most of Australia’s shelter needs, creates scarcity and cannot match the rich expanse of demand with a breadth of housing choice.....
Executive Summary
Housing affordability worsened in 2023, from
already challenging levels
Housing affordability worsened in 2023. The worsening was widespread, occurring across states and territories, cities and regions, income levels, age groups and tenure types.
Housing affordability deteriorated significantly for mortgage holders. Mortgage interest rates rose by an average of 125 basis points in 2023, and the average mortgage for owner-occupiers reached $624,000. Since the first increase in the Reserve Bank of Australia cash rate in May 2022, minimum scheduled repayments for borrowers have increased by as much as 60 per cent.
Aspiring homeowners experienced a decline in their ability to purchase a home. It takes the average prospective homeowner around 10 years to save a 20 per cent deposit for an average dwelling. Even with a deposit, only 13 per cent of the homes sold in 2022–23 were affordable for a median income household.
Renters in the private market experienced a sharp rise in rents. Advertised rents increased by 8 per cent in 2023 and have increased by around 35 per cent since the start of the decade. Finding a rental property is increasingly difficult. Nationally, the rental vacancy rate is 1.6 per cent – around its lowest level on record and well below the rate considered to reflect a balanced rental market of around 3–4 per cent. In some parts of the country, including some capital cities, it is as low as 0.5 per cent.
Worsening affordability placed additional pressure on demand for non-market housing. The number of ‘greatest needs’ households on public housing waiting lists rose by 2.4 per cent in the 2022–23 financial year. Waiting lists for First Nations housing rose by 10 per cent. Service providers reported a rise in demand for homelessness services and crisis accommodation.
Many households have made difficult trade-offs in the face of rising housing costs, including reducing spending on other essential household items; living further away from places of employment, education, and social and family networks; or living in overcrowded dwellings or in housing with inadequate or expensive heating or cooling options.
Worsening affordability is particularly problematic for vulnerable groups, including low-income households, single parents, young people, single pensioners, those fleeing domestic or family violence, people with disability, and First Nations Australians. Declining rental affordability correlates with an increase in homelessness.
Worsening affordability is contributing to poorer housing outcomes for First Nations Australians. First Nations households are half as likely to own their home, 6-times more likely to live in social housing, 3-times more likely to live in overcrowded dwellings and almost 9-times more likely to experience homelessness compared to non-Indigenous Australians. These poor housing outcomes impact on health and wellbeing, access to education and employment, and connection to community. Without targeted measures, undertaken in partnership with First Nations people, housing outcomes under the National Agreement on Closing the Gap are unlikely to be met.
This report tells us that:
More than 30 per cent of Australians rent their home. The number of renters is increasing, and those who are renting are doing so for longer. Renting is the only viable tenure option for an increasing share of the population. Australia’s rental system provides only limited tenure security and other rights to renters. Australia needs regulatory frameworks that support tenants’ rights and address the need for better tenure security. More institutional investment in rental housing could provide tenants with more rental options and add to the dwelling supply.....
The evidence base indicates that Australia’s tax framework influences the housing system in ways that have implications for supply and affordability. Tax arrangements could potentially be better calibrated to support housing supply and affordability outcomes. Australia’s tax system also favours home ownership over other forms of housing tenure, which can widen inequality between those who can and cannot access homeownership. A gradual transition to a more consistent taxation system across tenure types may contribute to a more equitable housing system.
Non-market housing, such as social housing and affordable housing, is essential infrastructure. It reduces homelessness and the incidence of poverty, supports economic productivity and labour market participation, and fosters more cohesive and sustainable communities. In some remote areas of Australia, social housing is the main form of available rental accommodation. There are federal, state and territory policies that will support the delivery of more non-market housing over the National Housing Accord period. However, levels of non-market housing are forecast to remain low relative to history and in comparison to other advanced economies, and lower than demand....
Supply of social housing
Australia’s social housing supply has fallen short of demand (Van den Nouwelant, et al., 2022). From the 1940s to the 1980s, government housing agencies built large volumes of new public housing (Chart 2.12). Instead of focusing mainly on the direct provision of non-market housing, governments have shifted towards a model of providing rent assistance payments to enable more households to rent in the private market. The provision of social housing is now primarily focused on supporting people in greatest need.
The number of non-market dwellings has stagnated as a result. This has contributed to a one-third decline in social housing as a share of the housing stock, from a peak of 5.6 per cent in 1991 to 3.8 per cent in 2021 (Chart 2.13). This indicates a reduction in the availability of adequate housing for lower-income and disadvantaged households. However, recent policy measures, such as the Housing Australia Future Fund and new public housing commitments by state and territory governments, mean that a rise in the current levels of investment in non-market housing is expected in coming years....
The report also draws attention to the following:
Box 2.1: Climate-related disasters
The housing system is inflexible when responding to natural disasters. The increased frequency and severity of natural disasters are adding to the demand for new houses to be built and for repairs on existing housing, often in higher-cost locations such as regional and remote areas. Rental markets are also affected when homeowners are forced to rent accommodation while their homes are repaired. Regional New South Wales was severely affected by its worst recorded flood in February 2022. In Lismore, 89 per cent of housing stock was severely impacted and 3 per cent was destroyed (Lismore City Council, 2022). Over the quarter to March 2022, house rents in Lismore increased 22 per cent to $550 a week. This almost matched the level of Sydney house rents, which were $600 in the same quarter (Domain, 2022). The supply response following natural disasters is slow due to the time taken to process insurance claims and increases in demand for labour and materials, leaving many residents without appropriate housing, sometimes for years after the event. The rebuilding following the Kimberley floods in Western Australia was significantly delayed due to its remote location and the pre-existing statewide shortage of tradespeople, which left people living in temporary shelters months after the floods (ABC News, 2023b). The impact of natural disasters has a lasting effect on housing in affected areas; for example, in the form of lower house prices due to a heightened risk of a natural disaster re-occurring. After 2017 floods in Lismore, property values normalised in 6 months. However, by March 2023, a year after the floods in the Northern Rivers, house prices in the most affected suburbs had fallen by 22–30 per cent – more than the regional average of 19 per cent (CoreLogic, 2023). The increasing severity and frequency of natural disasters could produce larger and longer-lasting effects on the housing system. [my yellow highlighting]
At Page 151 of this report is this section: 8.1 The Council has identified 10 areas of focus for
improving housing system outcomes.
Read it for the record but don't raise your hopes.
This comprehensive and at times overly optimistic report can be found at:
https://nhsac.gov.au/sites/nhsac.gov.au/files/2024-05/state-of-the-housing-system-2024.pdf
