Aerial shot of houses and apartments along the North Bondi coastline in Sydney, Australia. Recent reports indicate that Australian house prices will continue to trend upward, driven by rising immigration rates and a shortage of housing supply.
Andrew Merry | Moment | Getty Images
Australia plans to tackle rising house prices in the national budget as the country faces a housing shortage.
Despite aggressive monetary tightening measures by the Reserve Bank of Australia, house prices have risen steadily since rebounding from the downturn in 2022. Latest data from real estate consultants CoreLogic Data showed that house prices rose for the 15th consecutive month in April. Australia’s median house price is currently A$779,817 (US$530,115).
The rent has also gone up. up 7.8% per yearThat’s according to data released by the Australian Bureau of Statistics last month. This is the largest increase since March 2009.
“From a mortgage repayment perspective, affordability in Australia is at its worst ever,” CoreLogic Australia head of research Eliza Owen said. She also predicted house prices would continue to rise this year, but at a lower rate than in 2023.
Finance Minister Jim Chalmers will unveil the budget on Tuesday, which is expected to Focus on solving the national housing crisis.
The Albanian government has said it plans to allocate A$88.8 million ($58.7 million) to train 20,000 local workers in the construction and housing industries. It also plans to spend $1.8 million to streamline skills assessments for 1,900 potential immigrants and prioritize 2,600 in target occupations.
Housing supply tight
Sharply rising construction costs and shortages of labor and materials have slowed the delivery of new construction, hampering the supply of new housing. PropTrack recent reports.
“On the supply side, new housing is constrained by continued capacity constraints – particularly for finishing trades and where required skills are easily transferable to non-residential construction – and rapid growth in construction costs,” the RBA said. at the most recent March board meeting.
Developers and housing advocates call on Australian government to scrap restrictions on foreign skilled construction workers New fast-track visa stream. Opposition Leader Peter Dutton critical The Albanian government claims it has closed the door to skilled traders while failing to address immigration issues.
“There is currently a significant mismatch between housing supply and demand in Australia. The recent drivers of this mismatch are record highs in net overseas migration, while the residential construction industry is constrained by rising material costs and tight labor supply,” Owen said. “As a result, new homes will be completed more slowly as there is an influx of immigrants in need of housing.”
The country’s net income is 518,000 people The ABS said the year to June 2023 was the biggest rise on record. About 75% of immigrants arrive on temporary visas, More than half of them are international studentsaccording to ABS.
The National Housing Supply and Affordability Council (NHSAC) says Australia’s limited housing supply has further stretched by a variety of factorsThese include “a rapid return to immigration, rising interest rates, skills shortages, rising construction company bankruptcies, weak consumer confidence and cost inflation.”
“All of these factors combine to create an environment in which prices and rents are increasing faster than wages, rental vacancy rates are near record lows, 169,000 households are on public housing waiting lists, and 122,000 people are homeless. In Guigui, housing supply is expected to be very low,” it added.
The Albanian government established NHSAC in December as part of efforts to address Australia’s housing problems.
Last year, the government said it would build 1.2 million “well-located” new homes from July 1 to tackle the housing crisis. The authority has also allocated $500 million to promote the development of new housing in “suitable” locations.
Buying a house is out of reach
Housing affordability is declining as home prices and rents soar, outpacing growth in household incomes.
According to the latest data from the Australian Bureau of Statistics, while full-time full-time workers in Australia earn an annual income of A$98,098, the average annual income of those who can afford to buy a house is more than double that, reaching A$220,000. This is an increase of almost 40% from 2019’s A$160,000.
CoreLogic’s Owen said: “The result is lower home ownership rates and greater demand pressures on an already tight rental market, which then trickles down to the most vulnerable in our society, such as greater reliance on homelessness services. .
She also said high house prices would have “ugly” long-term effects.
“We believe housing is a larger driver of the wealth gap between wealthy and less wealthy households as income growth fails to keep pace with price growth,” Owen said. “Housing costs rise for renters and recent mortgage holders It also affects our productivity and economic capabilities because there is less money available for personal investment.”
The Federal Reserve Bank of Australia said in a statement May monetary policy decision “Household consumption growth has been particularly weak as high inflation and previous interest rate increases have affected real disposable income.” Households are saving and cutting discretionary spending, the central bank said.
—CNBC’s Christine Wang contributed to this report.
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