Australia’s property market is recovering but housing affordability is not: NAB
The housing market is rebounding in Australia, but affordability remains an issue for many Australians.
Key points:Australia’s property sector is growing but affordability is still an issueSome experts say Australia’s housing market has hit a “death spiral”The Government has said it will consider ways to help Australians who are strugglingThe Government is looking to provide more funding to help ease the housing crunch.
In a briefing note released to the media, the Reserve Bank said it is reviewing the sector, and that some property consultants are saying that Australia’s real estate market is in a “dead heat”.
“While we do not have any evidence to suggest a sudden and dramatic shift in housing prices, some analysts are pointing to the fact that prices are trending up and down and are currently lower than they were in late 2015 and early 2016,” it said.
“However, this does not mean that the housing market in Australia is dead.
The housing sector is likely to bounce back to its previous levels of strength.”
Key pointsThe Reserve Bank is looking at how the sector could improveThe Reserve bank has said that there are “a number of opportunities to assist people who are in need”It said that it is also exploring ways to make some housing projects more affordable, such as encouraging developers to build cheaper housing.
“The Reserve Board will be discussing this in detail over the coming weeks, but for now, we believe that a number of initiatives to improve the affordability of housing will be appropriate in light of the strong rebound in housing values,” it added.
“We have taken some steps in this direction, for example, by reducing the mortgage interest rate threshold for new home buyers and providing greater incentives for local governments to provide some affordable housing.”
The Reserve has also suggested that the Government should consider ways of supporting those in need, including:”Increasing the supply of affordable housing”and”providing greater assistance to people who have lost their jobs in the housing crisis”The report, which was released just weeks before the Federal Government’s Budget, comes as housing experts warned that Australia is on the verge of a “living death spiral”.
“The real estate sector is on a death spiral,” Nick D’Arcy, CEO of Sydney-based property consultants Craddock Property Consultants, said.
“The housing market, in many respects, is the only way to access decent-quality housing for Australians who need it.”
He said that in some parts of the country, people are being forced to move to other parts of town, or are unable to afford to live in their current homes.
“If you want to get a property, you are going to have to move.
And if you don’t have a home to live on, then you are not going to be able to afford a property,” he said.
Australia’s housing markets have been in a slump for the last few years, but the recent rebound has been accompanied by a dramatic increase in the number of new properties available for sale.
However, there are some experts who say that Australia has hit “a death spiral” because of a lack of supply.
“This has meant that we have had the lowest number of houses for sale in over a decade and a half,” Dr Paul Pritchard, an economist at the University of Sydney, told ABC News Breakfast.
“So there’s not a lot of supply in the market, so there’s a lot more pressure on prices to keep going up and it’s going to take time to recover.”
Dr Pritdale said that the current housing boom had been a huge hit on affordability.
“It’s not the case that we’ve been able to provide an appropriate supply of homes, or that we are in the middle of a housing bubble, or in a housing recovery, which is quite a different story,” he explained.
“That’s not happening.
The real estate industry is facing a dead-heat in terms of supply and demand, and if we are going down that path, then it’s a very serious problem.”‘
A death spiral’Australia’s economy has been in the doldrums for several years, and the real estate crisis has been the result of that.
But in some respects, Australia’s economy is recovering, as the country’s housing boom is returning to life.
In May, the Australian Bureau of Statistics (ABS) said that construction activity in the real-estate sector had increased by about 4.2 per cent in the September quarter, compared to the previous quarter.
Australia’s national housing market was growing, with the country adding an average of 2.5 per cent annual growth in property values over the past year.
However, the ABS also said that while some of this growth was due to people moving to new markets, it was also due to the increasing number of empty homes.