Housing Shortage in Melbourne
The country is currently experiencing a property shortage crisis and Melbourne is suffering the worst as house values continue to soar.
Angie Zigomanis, senior residential property analyst of BIS Shrapnel, commented that low income earners were at serious risk of being shut out of the property market, altogether.
A rise of 11.8% in Melbourne was predicted by the firm. She went on to say that, "this is something the Reserve Bank has been looking at for quite some time, and I guess the concern is that if you don't address the supply side of the equation well enough, it's going to raise the crisis and its negative effects."
"This is pushing more and more people out of the market, it reduces people's ability to buy and do other things. Remember, this is an economic problem because you're talking about the increase in value of assets that are already there, not contributing to the capacity of the economy. It's not like spending money on construction."
Adding to the housing dilemma is the issue of migration and rapid population growth. BIS Shrapnel pointed out that, "migration increase coupled with high interest rates and restricted credit from banks is only increasing the housing problem."
It is apparent that there is a shortage of around 200,000 dwellings. It is estimated that in only two years time that figure is set to rise to 250,000. Melbourne alone has a shortfall of around 42,000 dwellings. A report carried out by the Home Industry Association (HIA), found that if current building trends persist, Australia's cumulative housing shortage would reach 466,000 dwellings by 2020.
HIA Senior Economist, Ben Phillips said that, "if we don't get a comprehensive supply response to the accumulating housing shortage then the lack of affordable and appropriately located rental properties will only worsen, while pressures on existing home prices will continue at an undesirable rate, placing avoidable upward pressure on interest rates," Ben Phillips said.
The alarming reality is that there are a growing number individuals, couples and families around the nation who don't have a home available to live in or simply are unable to afford it.
With people scrambling to find a property, the inevitable effect is the fierce competition that follows within the property market. This drives up home and rental prices to unaffordable and unattainable levels. Many families are left struggling to cope with such high financial pressure.
It is clear that serious action needs to be undertaken quickly. A vast increase in dwellings is urgently required to be made available to buyers and the rental market. This should, in turn, assist in easing the overwhelming strain of the housing demand situation.
