This is the sentiment that the Treasurer Joe Hockey was saying as the Federal Government have said that it’s the RBA and APRA’s (Australian Prudential Regulation Authority’s) problem. However, house prices seem to be a problem for everyone except the federal government!
Said Mr Hockey: “That is a matter for the Reserve Bank and the Australian Prudential Regulation Authority. I am naturally hesitant to have government in any way interfere in the market, but of course, we are in some challenging times when it comes to monetary policy.”
So where does this leave us then?
Our Housing affordability and homelessness are big problems, and the current bodies are not coping to provide affordable houses to keep rise with demand.
This is not helped by the rising of population growth, averaging of 1.76% – this will be confirmed again on Thursday when the demographics survey run by the Australian Bureau of Statistics are released. If this rate is maintained, that our population in the next 10 years will increase by 2.36 million Australian Residents, and they will all need homes (assuming population currently is 23.6 million residents).
Throw in the housing market, especially in Sydney, being hot still especially with foreign investors. This is combined with the slow response to building new homes. So you have high demand for housing and a slow supply leaked out to the market – this brings and builds the signs of a hot market that we see in Sydney now.
We were interviewing real estate agents in the North West of Sydney and they prefer auctions because of the glut of foreign investors buying houses. One agent confirmed that 7/10 auctions in the North West of Sydney are bought by Foreign investors, and according to his sources, buying above market price.
Where are people moving?
They are moving predominately to the western corridor of Sydney. The Sydney Morning Herald have stated that:
The south-west area is set to be home to more than 300,000 new residents in 110,000 new dwellings, while the north-west will be home to more than 200,000 new residents in 70,000 new dwellings. SMH – article 19/9/14
Also the houses will get smaller, smaller yards, more houses..
From the start of September, there was substantial changes made to planning and housing zoning in the south west and north west, be prepared for reduction in lot sizes. It is expected that the new minimum lot sizes will shrink from 360 square metres to 225 square metres. In the new growth areas, developers are able to offer lot sizes as small as 125 square metres. This is great news for developers, not so much for the owner.
It seems as though this change may help relieve housing dwellings somewhat but will this lead to overcrowding of public areas, amenities and services in areas that are still trying to improve infrastructure to cope with the current population?
Time will tell, and according to the Australian Government – its not their problem.
What do you think?
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