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, but they are also 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 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!

Dick Smith Housing Affordability [short] from Dick Smith Fair Go on Vimeo.

More First Home Buyer 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 its 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 properties to consider

Learn more about Adelaide Hills including current opportunities to enter the Adelaide Hills property market

Oh Adelaide Hills – you are so beautiful

Capital City Property Price Movements: 14/August/2017

Updated daily, The CoreLogic Daily Home Value Index shows 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 would have rose 20%.

Capital City Index Score Qtr on Qtr

% Change

Yr on Yr

% Change

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%

(Source: CoreLogic)

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).

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:

New South Wales new home of the week

Queensland new home of the week

South Australia new home of the week

Victoria new home of the week

Western Australia new home of the week

Very practical! – Could you see your young family living in this home?

Preliminary Weekend Auction Clearance Rates (12 – 13 August 2017)

(Source: CoreLogic)

Tweet of the Week

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Written By,

First Home Buyers Australia

First Home Buyers Australia
First Home Buyers Australia

Australia’s leading organisation specialising in assisting first home buyers achieve the great Australian dream of property ownership.