Housing crisis in Australia
It has been predicted that the building of new houses will fall short of demand by 20,000 houses until 2010. With an increase of about 1/4% in the cash rate imposed by the Reserve Bank, almost every month for the last 8 or so, people with house mortgages are defaulting on their loans. These owners go back into the rental market.
The population of Melbourne, where I live, is also growing steadily, so that Melbourne has reached the lowest rent accommodation availability in the country. Only about 1% of all housing is available for rent.
Recently, I became acutely aware of the problem when my son and his girlfriend were looking for rental property. They were having extreme difficulty in getting anything. At the same time, I heard on 774 am radio that the Drive program were doing a piece on the housing crisis and were asking for emails from people, so I emailed the program. My email got read out and it went something like this.
” My partner and I have a fully paid off house and have had one since we were in our mid 30s. We were very lucky. We were baby boomers.
Our problem now is accommodation for our son and his girlfriend. They have been living in a one bedroom flat for a year. They are now looking at 2 bedroom flats but they were too expensive or 80 people applied and some were prepared to pay more.
They have noticed since last year that the rents have gone up $20 a week for similar flats and if they stayed where they are which is no longer an option, that rent would most likely go up too.
They have a car so they are looking for a flat with car access to one of the universities and transport to the other. They go to different universities. They say, the closer to transport you are the more the rent is.
They cannot get accepted for a flat and will most likely have to return to one of their parents’ homes. You can imagine how much stress this is causing for all concerned.
They do not want to return to their parents’ homes and this parent doesn’t want them to return to this home after so much emotional adjustment to her son leaving in the first place, but of course it will be available”.
The next night the 7.30 program addressed the rental property market showing many professional couples and singles not being able to find a place, let alone those who do not have as much disposable income.
[As it turned out, my son did get a house to rent for 9 months. He and his girlfriend knew the real estate agent from school. This is why they got the house.]
I worry, of course about the next move.
In the past the State governments have erected huge towers of flats for public rental, but now these are impossible to get. The government also provides some public housing which are houses and not flats.
The house idea worked with no-one else needing to know that their neighbours are renting at a lower rate due to it being a public house, but the high rise towers brought with them ghetto type living standards, with all the expected social problems.
We need more public housing immediately because otherwise parents and children will be living with each other for the foreseeable future, except for the rich who can afford to buy flats for their offspring. That might apply to kids who get on well with their parents. Otherwise I can see homelessness increasing astronomically.
I do wish I knew too how owners and investors decide on their tenants, because there seems to be no rhyme nor reason for their decisions.
March 28th, 2008 at 8:11 am
The real problem is high house prices caused by bad government policy. Help do something to make housing more affordable, visit http://www.australian-voters-for-affordable-housing.org for more details.