According to a report by a housing action group, an average Sydney-sider needs to spend more than 8 years worth of salary to purchase a home in Sydney. This represents an increase from 5 years of salary in 2001. This is still a problem despite the fact that most states have seen a drop in property prices over the past 12 months.
Australians for Affordable Housing (AAH) – which is made up of 60 community and housing groups – launched the report today as part of a push to provide more affordable housing for Australians.
“Australian households are paying more than they can afford for housing, with over 740,000 renters and more than 380,000 home owners with hefty home loans suffering from significant financial stress,” spokeswoman Sarah Toohey said.
In Sydney, it takes 8.1 times the average annual income to afford the median house, up from 5.6 times in 2001, according to the report.
The group is concerned that increased property prices will see first-time buyers to stay in the rental market for longer, competing for properties and pushing up rental prices. Since 2005, rents in Australian cities have risen at twice the rate of inflation, according to the report.
It should be noted that while government was talking up interest rates and banks are making it very difficult for developers to access construction loans – demand will exceed supply in the premium areas of Australian capital cities including Melbourne and Sydney.
The report also found that 50 per cent of low-income home owners are having a hard time keeping their heads above water with many behind in their home loans.
“The NSW housing system is failing too many people. We need the NSW Government to commit to working with federal and local governments to solve this crisis.”
Last week, the NSW Government was called on to implement an emergency housing plan after figures showed new-home starts had plummeted.
The 20.1 per cent fall, which was worse than the 16.3 per cent recorded by flood-hit Queensland, prompted calls from the Urban Taskforce for an emergency housing supply plan by Christmas.
“NSW’s housing supply is clearly in dire trouble,” said the organisation’s chief Aaron Gadiel.