Housing Affordability in Australia: Then and Now

With a booming housing industry, affordable housing has become close to non-existent in Australia and provides both those looking to buy or rent with difficulties in finding affordable options.

With the housing industry as a whole not showing any signs of affordability any time soon, certain areas are showing promise to homebuyers with newly designed architecture styles.

Then

In the mid-20th century, the Australian government was working hard to increase the housing supply in the country so that more people could buy into the Australian dream and get affordable housing. The idea of expanding housing in the country quickly became popular and increased the popularity in no time.

The interest in Australian housing grew to such a speed that the government chose to rather look at inflating demand and not try to increase housing supply in the 70s. Due to the change in policies, housing affordability and supply affordability have been on the decline since the early 1980s.

One example of how housing prices have increased is that in 1990 anybody who was looking at buying a house would need to pay up to 2.5 times the average household income, whereas now it would cost 5 times that.

Now

With the average house now costing 5 times the average household income, the housing industry is not seeing a lot of affordable options. With low to mid-income earners, 17.6% of homes in the country are available in their price brackets; in capital cities like Sydney, the same earners would only see around 4.2% of houses fall under their budgets.

Certain areas throughout Australia are seeing some hope in becoming more affordable with housing. This can be seen in Queensland, with low to mid-income earners being able to afford over 26% of the homes on sale. Especially in towns such as Brisbane in Queensland, there has been an increase in affordability.

In main centres and destinations such as Tasmania is close to impossible to rent or purchase cheaper homes. Some places are slowly showing an increase in affordability, such as the Northern Territory.

Slowly but surely, the housing market in Australia is seen to become more affordable to renters and those looking at purchase, although the rising interest rates might cancel the benefit of modest price falls in the housing industry.