Housing Affordability not so affordable

In the C21st housing affordability is becoming increasingly unaffordable. Buying a house in a major capital city is unimaginable for a considerable percentage of the Australian population and, as reported in the media today, rent is skyrocketing all around the country, especially in Perth and Sydney.

With the election drawing nearer, it’s quite entertaining to watch the two major parties, Labour and Liberal, playing the blame game during question time.

In the Blue Corner, we have Mr. Howard and he’s party informing us all, that since they have been in office, unemployment rates are at the lowest they’ve been in 30 years, which greatly assists the majority of Australians with housing affordability. Without employment, Liberal states that individuals cannot be granted a mortgage. The Liberal government basis its main argument for housing affordability on the lowered inflation, interest and unemployment rates that have come into play since Liberals have been in office. The Government believes that housing affordability is a chain reaction; as additional people are earning wages through increased employment, the economy becomes stronger, which results in supply and demand pressures increasing raw housing prices, which the Government believes to be unfortunate but also unavoidable due to Labours present stance. During question time, Costello likes to play the blame game when asked about housing affordability and supply and demand pressures. Costello insists that (specifically in the state of N.S.W) it is not the fault of the federal government of the day that supply pressures have increased, but rather the consequence of the Labour State Government, who refuse to release extra land, to help ease increasing house prices.

Now lets focus our attention on the Red Corner, with the Labour Government up in arms about the state of housing affordability in Australia, believing that it is a very prominent issue in the minds of many Australians. The Labour Party proposes to do much more than the present government when it comes to housing affordability, promising that if they are elected, they will introduce a Housing Affordability Fund, which will assist up to 50, 000 new home buyers over the next five years.


From my perspective, wouldn’t it be a fabulous idea (and perhaps it is a somewhat idealistic view) to combine these two parties proposals. Whoever the next Government of the day is, should make a conscience and continued effort to keep inflation, interest and unemployment rates down, but also consider releasing some extra state owned land to accommodate the supply and demand pressures and the current housing boom. Additionally, to implement Labours Housing Affordability Fund would greatly assist many Australians get the head start that so many of them need to initially break into the market. To do this would certainly ease the financial pressures of many Australian families, who are currently on average spending $1 out of every $3 earned on mortgage repayments. Finally, any policies introduced by the government that would help to decrease the huge rising rent costs around the country, which have come as a result of Generation Y growing up and wanting to spread their wings in the inner city rental market instead of owning a home in the suburbs, would be of huge benefit to the entire nations economy!

It is my hope, that regardless of which party is elected in the coming months, red or blue, Labour or Liberal, that we don’t see the great Australian Home Owning Dream diminish, due to clumsy housing affordability policies.



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