The newspapers have lately been full with articles pointing up how expensive houses have become for any prospective purchasers, especially first-time home-buyers, and even how costly obtaining rental accommodation is also. In the latter case there is now a critical shortage as well.
In an article in The Age, "Home, sweet dream" Tim Colebatch drills down into the actual figures on housing. No wonder the Australian dream of securing a quarter-acre block is becoming a mere dream for increasing numbers of people.
"At no time since statistics began have Australians directed so much of their spending into buying and improving homes: buying, building, renovating and redecorating, to make them an image of the way we want our lives to be.
Fifty years ago, when our population was growing twice as fast as now, Australians spent 4.5 per cent of their gross domestic product (GDP) on building and renovating their homes. In the past four years, on average, we have spent 6.6 per cent, and that's not counting furniture, wide screen TVs, and all the other things we need to fulfil our destiny. And real estate sales dwarf construction.
In Victoria, the Valuer-General tells us, the value of residential sales swelled from $13 billion in 1995 to $45 billion in 2003, edging down to $42 billion in 2005. At national level, lending to home buyers (excluding refinancing) has grown almost sevenfold in 15 years: from $28 billion in 1991 to $188 billion in 2006. After spending all that money, you might think Australians now have more housing than they know what to do with. Not so.
First, the Housing Industry Association and the Commonwealth Bank report that housing is now more unaffordable than at any time in the 23 years they have measured it. For the first time, the average Australian household can no longer afford to buy the average Australian home. With the median first home costing $376,000 in the December quarter, they say, buyers need a gross household income of $93,300 to adequately cover the mortgage bill of $2332 a month (or roughly $28,000 a year). But average household income, they estimate, is just $91,300.
Sure, we all find ways of adapting: lower our ambitions, look for something further out or less attractive, move back with the olds and start saving, or keep renting until affordability improves. But it is quite clear that, as a society in which home ownership has been central to the Australian dream, we have a big problem. Younger people and lower income people increasingly are unable to afford the dream."
In an article in The Age, "Home, sweet dream" Tim Colebatch drills down into the actual figures on housing. No wonder the Australian dream of securing a quarter-acre block is becoming a mere dream for increasing numbers of people.
"At no time since statistics began have Australians directed so much of their spending into buying and improving homes: buying, building, renovating and redecorating, to make them an image of the way we want our lives to be.
Fifty years ago, when our population was growing twice as fast as now, Australians spent 4.5 per cent of their gross domestic product (GDP) on building and renovating their homes. In the past four years, on average, we have spent 6.6 per cent, and that's not counting furniture, wide screen TVs, and all the other things we need to fulfil our destiny. And real estate sales dwarf construction.
In Victoria, the Valuer-General tells us, the value of residential sales swelled from $13 billion in 1995 to $45 billion in 2003, edging down to $42 billion in 2005. At national level, lending to home buyers (excluding refinancing) has grown almost sevenfold in 15 years: from $28 billion in 1991 to $188 billion in 2006. After spending all that money, you might think Australians now have more housing than they know what to do with. Not so.
First, the Housing Industry Association and the Commonwealth Bank report that housing is now more unaffordable than at any time in the 23 years they have measured it. For the first time, the average Australian household can no longer afford to buy the average Australian home. With the median first home costing $376,000 in the December quarter, they say, buyers need a gross household income of $93,300 to adequately cover the mortgage bill of $2332 a month (or roughly $28,000 a year). But average household income, they estimate, is just $91,300.
Sure, we all find ways of adapting: lower our ambitions, look for something further out or less attractive, move back with the olds and start saving, or keep renting until affordability improves. But it is quite clear that, as a society in which home ownership has been central to the Australian dream, we have a big problem. Younger people and lower income people increasingly are unable to afford the dream."
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