The hidden cause to Australia’s housing affordability problem
FHBA Market Update: 14/August/2017
In today’s FHBA Market Update we take a look at how Australia’s immigration program impacts housing affordability, why 1 in 3 people are ‘giving up’ on owning property, how first home buyers are slightly pushing back, our latest favourite properties for first home buyers, the latest property prices, weekend auction clearance rates around the country and how you can get the First Home Owners Grant on properties that are already built.
What do you think of when we ask “what are the causes of housing affordability in Australia”?
Take a second to think about your answer.
If you came up with any of the following (or something similar) you are not alone with your thoughts: negative gearing (& generous tax incentives for investors), too many investors, baby boomers sitting pretty on top, not enough affordable housing being built, not enough help with the deposit, etc.
Now these causes are not only commonly debated, they are all indeed contributing factors to the housing affordability problem. But there is an additional major cause that does not get much attention in the news and that is Australia’s immigration policy.
Australia currently has a record immigration intake program of around 200,000 people annually. This policy is causing our population to grow faster, thereby increasing demand for housing and putting upward pressure on property prices.
So why isn’t this being discussed in Parliament, or in realestate.com.au or Domain? Well you see, a growing population is in the interest of our politicians (both major parties) and media companies. Bringing more people into the country results in more capital flowing into Australia, increases headline economic growth figures and increases government tax revenue. And if there are more people, naturally media websites will do better thanks to more readers.
We don’t want to make it sound like we are anti-immigration or a growing Australia. But we do believe that it is important for young Australians and aspiring first home buyers to know that this a contributing factor to aspiring first home buyers being priced out of the market.
For a nice summary on how Australia’s immigration policy impacts housing affordability and why it is not debated very much in mainstream media watch this recent video from Dick Smith on his Dick Smith Fair Go website – make sure you watch it to the end!
More First Home Buyer News
- Survey shows Australians giving up on the great Australian dream – A new survey shows that almost one in three young Australians do not believe they will ever be able to afford a home – see the survey results + FHBA co-founder Taj Singh’s thoughts on Domain
- So I don’t have to ‘build’ a property to get the First Home Owners Grant? – There is a common belief that in order to get the Grant for first home buyers that you must ‘construct’ a new property, but, this is not necessarily the case – see other ways you can get the FHOG in FHBA News
- First home buyers fighting back – There are several indicators that first home buyer activity in the market is improving – see what this means for you in FHBA News
Current hotspot in focus: Adelaide Hills
Every fortnight we take a closer look at an area in Australia that is popular with first home buyers. Our current first home buyer hotspot is Adelaide Hills, South Australia. Later this week we will reveal our next hotspot in focus.
- Adelaide Hills is located 33km east of Adelaide
- Around a 30 minute drive to Adelaide CBD, it is close enough if you need to travel to the city for work or other reasons, yet far away enough that you can enjoy this lovely and peaceful part of Australia in all it’s glory
- There are plenty of suburbs across the region for you to consider calling home and with a median house price of $428,000 you will find there are plenty of poperties to consider
Capital City Property Price Movements: 14/August/2017
Updated daily, The CoreLogic Daily Home Value Index show’s how property prices have been changing in our largest capital cities over the last 12 months. If Melbourne performed the way it has been over the last 3 months for a whole year then the city’s’ median property price will have rose 20%.
|Capital City Index Score||Qtr on Qtr |
|Yr on Yr |
|Adelaide: 489.19||+ 1.8%||+ 3.3%|
|Brisbane: 554.97||– 0.8%||+ 3.1 %|
|Melbourne: 947.43||+ 5.2%||+ 16%|
|Perth: 564.36||+ 0.1%||– 1.7%|
|Sydney: 11140.47||+ 3.6%||+ 12.6%|
Interest Rates Update: 14/August/2017
In August the Reserve Bank of Australia (RBA) opted to leave the official cash rate on hold at a record low of 1.50%. In the betting markets most money is on no rate changes in 2017, although more money is on a rate increase being the next RBA move (over a rate decrease).
- Compare a range of high-interest savings accounts
- Compare a range of home loan rates
- Speak with a home loan expert
New Homes of the Week (edition 67)
These are our top picks for First Home Owner Grant (FHOG) (& FHBA 50 Rebate) eligible properties this week! All the homes are affordably priced for aspiring first home buyers:
Preliminary Weekend Auction Clearance Rates (12 – 13 August 2017)
Tweet of the Week
Where renting is most common: https://t.co/NzfYgfKp8Q #FHBA #realestate #ausproperty #auspol
Missed a previous FHBA Market Update? Click here to catch up now
First Home Buyers Australia