Home Ownership In Australia On The Decline

Post by Sharat on December 28, 2018 · Under News · Comments Off on Home Ownership In Australia On The Decline 

It is no secret that the Australian property market has seen better times. Following hikes in interest rates and those seeking to get on the property ladder sitting on the side line for now, things can hardly be worse. According to the latest survey results, home ownership between 2001-2004 and 20013-2016 declined by 3.7 per cent across the country and when you take the 18 to 24 age bracket into consideration the figure fell by 5.9 per cent.

Tighter lending restrictions

First time home buyers constitute about 18.1 per cent of the market, representing and increase of 4.9 per cent from two years ago. Experts believe this trend is probably the result of tighter lending restrictions imposed by the regulator effectively blocking investors from the market. The property market consists of three types of players, investors, upgraded and first-time buyers. What is happening right now is that banks are lending money to home owners instead of investors.

Investors being blocked

The good news is that the lower investor activity has resulted in declining home prices making it easier for first time buyers to get on the property ladder. Unfortunately, family friendly housing is increasingly scarce which means property prices are likely to rise which will make it harder for first-time buyers to enter the market. The Federal Government is examining the issue but a more robust plan needs to be developed in order to incentivise the construction of more suitable housing.

Comprehensive housing strategy needed

Without the existence of a comprehensive strategy, experts believe that the present supply and demand scenario will once again lead to a situation where property prices rise quickly, making housing increasingly unaffordable and resulting in lower home ownership rates in the country. There needs to be some strong incentives for developers to meet development targets and increased supply offered by all levels of government. Land supply needs to be released and development should be the product of coordinated strategy and targets.

 

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