A Home for Everyone? – Not if you’re a young family
As home ownership rates for Australians aged 25-34 sink to a record low of just 42% in 2021, the Urban Development Institute of Australia National calls for political leaders to immediately support initiatives to boost new housing supply.
“It is shocking to see home ownership rates for younger families disintegrate so sharply,” said Max Shifman, UDIA National President.
Contemporary research suggests that by 2041, 75% of young households will be unable to own a home and will likely remain life-long renters.In 1981 the home ownership rate for young families aged 25-34, was 61% and 50% in 2006 (see graph below). Source: ABS; Grattan Institute; AHURI (2020); Ableson (2005)
With the median house price across capital cities increasing to almost $800,000 in 2022, up from $564,000 in 2016, it is not surprising to see the dream of home ownership moving further out of reach.
“Young, aspirational families are being let down by planning systems that create delays, multiply inefficiencies, increase costs, taxes and charges, all of which ultimately holds back the delivery of housing and sends prices skyrocketing,” said Shifman.
Not only is it dramatically harder to own a home, but also increasingly difficult to rent. Shortages of new housing stock drive up prices, forcing Australians to rent for longer, and at higher rates.
“The irony is that the increasing rents and prices push more people into community housing, which is impacted by the same supply and viability issues,” said Shifman.
Affordability issues in urban and regional areas are largely the result of a chronic lack of development ready land, something which can be addressed through a wholesale review of the planning and housing approval system to unblock supply.
UDIA’s 2022 State of the Land report shows, that greenfield lot delivery could plummet by 43% this year, due to lack of supply, fuelling further price hikes. This is exacerbated by approvals for multi-dwelling projects sitting at near decade lows.
“It does not have to be like this. We can turn things around by acting now to put in place straightforward and mostly inexpensive initiatives that will accelerate delivery of new development ready land and homes,” said Mr Shifman.
“Setting clear housing targets, streamlining approvals for enabling infrastructure, zoning or construction and unclogging planning systems will deliver real productivity and housing supply,” he added.
The UDIA National 2022 Federal Election Policy Platform – “A Plan for Prosperity” – provides a roadmap for housing-led economic growth and recovery, centred around the delivery of more housing supply across the spectrum.
“Federal political leadership should incentivise states and territories to boost development ready land, fast track enabling infrastructure and streamline planning and approvals,” said Maxwell Shifman.
“As an added bonus, increasing housing supply will free up the development and construction industry to create economic growth and jobs that will support more Australians to purchase their family home,” he said.
UDIA National is keen to work with all political leaders to put in place straightforward solutions that will give more Australian families their best chance to have a home of their own.
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