Housing security is one of the fundamental needs of any civil society, something that Australia’s high rates of home ownership have guaranteed – until now.
Lack of affordability has seen rates of home ownership fall to 67 per cent in 2011 following a downward trend that could ultimately see it drop to around 50 per cent.
It’s an alarming statistic and one that requires an all of government bi-partisan response at Federal and State level. There is no simple solution to a problem that has been decades in the making, in fact since the post-World War II surge of land releases that saw home ownership rise to 71.4 per cent in 1966, its highest level ever.
But the garden city quarter acre block model was flawed. It led to sprawl, wasteful and unsustainable land use, poorly serviced suburbs on the urban fringe requiring huge expenditure in roads and public transport and ultimately the beginning of the inequality we have today.
The introduction of Strata title in NSW saw some large land holdings redeveloped into the six-pack housing unit but even then the model was unsustainable. Many of these unit developments have come to the end of their useful life but renewal of this stock has been restricted by strata laws requiring 100 per cent of lot owners to agree before redevelopment can proceed.
The introduction of strata reforms at the end of next month will make it easier to redevelop strata properties however there are many planning roadblocks between here and meaningful urban renewal.
For those who are inclined to beat up on Generation Y as spendthrifts who’d rather splurge on Gucci loafers or handbags than save for a home, consider that in 1975 a home could be purchased for four times the average salary. Today it is 12 times.
The popular response to rising real estate prices in Sydney and Melbourne (to a lesser extent) has been to blame Chinese buyers. However the statistics don’t support this particular brand of xenophobia.
In fact the housing affordability debate is full of inconsistencies. Anybody with a sense that there should be equitable access to a roof over your head will look at the weekly reporting of capital city auction results with a degree of alarm. Yet if you own a home, it’s more likely an equal measure of alarm and glee.
The discussion about increasing density to increase supply, particularly in inner and middle ring suburbs is equally applauded, as long as that density is not in your own suburb or street.
Investors are decried for outbidding young first home buyers but the outcry is somewhat muted if it’s our own investment purchase, helped along by cheap finance and easy access to a loan because we already own a home. The system is geared to facilitate home purchasing by those who already own property while locking out those who can’t find a way in.
NSW Planning Minister Rob Stokes has demonstrated a commendable grasp of the problem and has set in motion a multi-pronged approach to dealing with it.
Land releases on the fringes are balanced by an equal focus on urban renewal in the inner and middle rings. But this is where planning gets tough. It is far easier to carve up a greenfield site than to negotiate the minefield of competing interests who get the need for change on a philosophical level but on a practical level would rather it happened somewhere else.
But if we don’t tackle affordability we are looking at the prospect of half the population renting throughout their lifetime. That’s no terrible thing when you’re working and earning but come retirement when your income is fixed but your rent is not, there is the very real prospect of serious housing distress.
So while we’re looking at different models of housing and home ownership perhaps we also need to begin thinking of different models of renting.