In the lead up to the 2022 Federal Election, the Real Estate Institute of Australia (REIA) is calling on governments to create big picture structural changes to enable supply and properly deal with the decreasing housing affordability.
REIA President, Hayden Groves said property listings have continued to plummet despite strong buyer demand which is seeing record prices still being achieved in most markets across the nation.
According to SQM, in March this year there were 218,398 listings across Australia compared to 256,568 listings over March 2021. February 2022 figures show 214,495 listings compared to 257,952 in 2021 while January’s listings numbered 214,495 in 2022 compared to 256,116 twelve months earlier.
Mr Groves said home ownership is part of the Australian way of life and the benefits of buying a home extend well beyond the individual – it’s a long-term game that secures wealth for generations to come.
“Property has remained a standout investment for homeowners with values increasing at the highest rate in two decades with a rise of 25.1% in 2021, with the weighted median house price now above $1m for Australia’s eight capital cities.’
“These kinds of prices while good for owners, are concerning for first time buyers
“Prime Minister, Scott Morrison’s announcement that the Home Guarantee Scheme was to be extended with the price caps increased is a great help in easing affordability.
“Increasing the price caps for homes available under the Scheme means more people have more options when purchasing a home, and the new caps help accommodate larger families under the Family Home Guarantee.
“The Home Guarantee Scheme had already helped 60,000 Australians on the path to home ownership.,” he said.
Mr Groves said first home buyer numbers continue to ease with new loan commitments to owner-occupier first home buyers dropping 8.3 per cent in February 2022.
“This was 36.7 per cent lower compared to a year ago, and continued the decline seen since the recent peak in first home buyer lending in January 2021.
“According to our Housing Affordability Report, the number of first home buyers decreased to 37,620, a fall of 0.4% during the quarter with first home buyers now making up 34.1% of owner occupier dwelling commitments, a decrease of 7.8 percentage points over the year.
“It’s a similar story for renters who are facing tight vacancy rates at under 1.0% in many capital cities while the proportion of income required to meet median rent increased to 23.0%, an increase of 0.1 percentage points over the quarter and an increase of 0.3 percentage points over 2021, according to REIA’s Housing Affordability Report.
“While it’s a very different market to the pre-election softening in the lead-up to the 2019 Federal Election, where uncertainty around negative gearing led to a major drop in investor confidence, rising stamp duty taxes continue to be prohibitive for owner occupiers,” he said.
