Housing Affordability Falls to Record Lows
October, November and December 2007 housing figures released today by the Housing Industry Association show that housing affordability has dropped to an all time low.
In 1996, the average home cost four times the average wage. In 2007, the average home cost seven times the annual wage.
Average rents for three bedroom homes have risen by 82 per cent over the last decade. Rental vacancy rates have halved since 2004.
Despite these persistent trends, the Howard Government ignored the warning signs and was asleep at the wheel on housing policy.
Housing experts, such as the HIA, have long called for an increase in the supply of affordable housing.
This advice fell on deaf ears with the former government.
This is the legacy the Rudd Government has now inherited.
While there are no silver bullets to housing affordability, in contrast, the Rudd Labor Government is working hard to roll out our comprehensive affordable housing agenda.
It will take time to fix a difficult problem that has developed over a decade.
Our policies include:
- First Home Saver Accounts, which will help young Australians save for their first home through special low tax superannuation-style savings accounts;
- Housing Affordability Fund, which will increase housing supply by providing money for local infrastructure, and giving state and local government incentives to lower development charges;
- National Rental Affordability Scheme, which will provide investors tax incentives to increase the supply of new affordable rental properties across Australia, saving 50,000 low-middle income families 20 per cent on their rental bills; and,
- A better approach to land release with surplus Commonwealth land being freed for housing development or community infrastructure.