Key measures to improve housing affordability
It has been the goal that has motivated generations of Australians workers – owning a home. But unprecedented price growth and pockets of undersupply has made this almost an impossibility in certain markets. Even with prices moderating in some key markets and regional centres, families and young couples are still struggling to find an affordable home. But there are some strategies that could assist in their quest.
Reform and diversify
The `Great Australian Dream’ no longer means a freestanding home with backyard. Today, it can mean a townhouse or apartment. Governments and developers are now recognising the importance of well-designed high density living in proximity to transport and retail hubs. But more reform could see smaller more flexible floorplans, resulting in even cheaper homes.
Planning restrictions like SEPP65 guidelines in Sydney may have merit for ensuring quality design guidelines, but they limit the construction of smaller studio style apartments.
Banks still feel more comfortable with lending for larger properties which is problematic for first home buyers and low-income workers looking for an affordable entry point into the market. Allocating dwellings for social housing is important. Our neighbourhoods need a broad socioeconomic mix that caters for low to middle income workers. Sustainable communities need teachers, police officers, nurses and other emergency services workers who can afford to live close to where they work.
Building more properties may seem like the obvious solution to housing affordability, but it is not as easy as it seems. We need to make sure that whatever is being constructed is affordable to owner-occupiers, not just investors. We are already seeing an increase in the supply of apartments in key capital markets and time will tell whether those developments eventually meet market demands. Location, good design and access to open spaces are essential in ensuring an apartment project will have appeal and retain value. Lifting restrictions on subdividing suburban blocks could unlock unused land which could help to ease affordability. Likewise, group suburban sales close to transport links could provide developers with more land that could be better designed for future generations with higher densities.
Land banking – whereby owners opt to leave a parcel untouched in the plan to simply gain future growth, rather than building dwellings – also creates a strain on housing supply. Concessions on infrastructure charges, rebates and other incentives which make it financially attractive to activate sites for housing supply are possible measures to limit the appeal of land banking.
Incentives for baby boomer dwellings
A survey of 800 people aged over 50 jointly undertaken by LJ Hooker, Downsizing.com.au and SeniorsHousingOnline.com.au found only 10 percent of respondents intended to live out their lives in the family home. The Government’s non-concessional contribution into superannuation is an attractive incentive to entice Baby boomers to sell the family home. But even though there’s an overwhelming willingness to move into something more manageable, many despair they’re unable to downsize within their local community, where they have friends, family and long-standing connections, because of the suitability of housing. Incredibly, 89 percent of respondents in the aforementioned survey indicated having one or more spare bedrooms in their dwelling. If developers were encouraged to provide suitable, pre-aged care housing options for baby boomers, more family homes could be freed up for their intended purpose.
A high-speed rail network linking regional areas to capital cities has always seemed futuristic but could it be much closer than ever thought.
The Federal Government - under its `Faster Rail Prospectus’ - is currently funding the investigation of three routes that could slash travel times. Among them, a proposal by the Consolidated Land and Rail Australia (CLARA) to build a fast train line from Melbourne to Greater Shepparton that could reduce the journey to just 30 minutes. An upgrade of the existing Sydney to Newcastle rail is also being considered with the aim of reducing travel time by an hour and a three-stage project to improve rail travel from Brisbane to both Moreton Bay and the Sunshine Coast. And there is more potential to be unlocked around already existing affordable regional hubs by linking these to metropolitan areas.
Improving infrastructure to regional areas will dangle a carrot to city dwellers to consider living outside the metropolitan area, easing competition and price pressures in the major housing markets.