Australia\u2019s housing and cost of living crisis is hurting the less well off<\/h4>\n
Australia\u2019s housing crisis is deepening, with median Sydney house prices reaching 13.8 times the median household income, placing it among the least affordable cities globally.<\/p>\n It is forecasted that Australia will also miss its national housing targets by over 250,000 homes this year. Without bold reform \u2013 like reduced immigration and stronger regional development \u2013 the cost of living will continue to rise, leaving more families struggling to find affordable housing.<\/p>\n Transcript<\/strong><\/span><\/p>\n Hi, I\u2019m David Buckland, and welcome to this week\u2019s video insight.<\/p>\n The concept of \u2018Big Australia\u201d is designed to boost national GDP, fill labour shortages and support multiculturalism. However \u2013 although an unintentional outcome \u2013 our residential housing sector is in a supply crisis, crushed under the weight of our growing population, leaving the \u201cAustralian Dream\u201d of owning a home out of reach for many.<\/p>\n According to property research agency,\u00a0Cotality, nearly two-thirds of the residential properties in Sydney are worth more than $1.0 million, with the median house price sitting at $1.69 million according to online real estate platform, Domain. This means that the median house price is sitting 13.8X the median household income \u2013 awarding Sydney second place as the most unaffordable city to work and live in, globally.\u00a0<\/p>\n Since 2000, Australia\u2019s population growth has grown by over 46 per cent. That\u2019s an extra 8 million people that have required housing over the past 25 years. On the graph, you can visualise this disparity of Australian immigration intake compared to other countries.\u00a0 And its getting worse.\u00a0<\/p>\n Already we are seeing thousands of high-rise towers pop up near \u201cactivity centres\u201d, the loss of green space, increased pressure on roads, elevated energy prices relative to income, and record rents relative to income.<\/p>\n The National Housing Supply and Affordability Council (NHSCA) forecasts new housing supply in Australia over the next five years to fall about 260,000 homes short of its 1.2 million target \u2013\u00a0with New South Wales is projected to be the worst off. The Housing Industry of Australia\u2019s (HIA) Tim Reardon warned that Australia\u2019s housing shortage would become \u201cmore acute until we exceed the rate of home building at 240,000 homes a year in a sustained way\u201d. \u00a0<\/p>\n With the combination of the Reserve Bank of Australia\u2019s cash rate coming down to 3.85 per cent, the aforementioned population strain, and severe underbuilding relative to the Federal Government\u2019s National Housing Accord, it appears house prices are going to remain highly elevated relative to income.\u00a0<\/p>\n All levels of Government continue to obsess with a \u201cBig Australia\u201d, but don\u2019t understand the associated issues such as the housing crisis, the flooding of low-quality builds, pressure on the health sector, and strain on public infrastructure these policies are causing. Younger Australians feel they aren\u2019t getting \u201ca fair go\u201d \u2013 especially in comparison to their parents\u2019 generation.\u00a0<\/p>\n Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.<\/p>\n<\/div>\n<\/div><\/div>\n
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David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.<\/p>\n<\/div>\n<\/div>\n