Housing Affordability in Australia

Owning a home is every person's dream, but not everyone can afford to achieve their dreams. Nowadays, housing affordability has been one of the key issues that have been in the spotlight in every country in the world. In Australia, a country with a high cost and standard of living and a fast growing population, focus should be given by the government on the housing cost issue. Adequate housing for the people is vital not just to uphold the social welfare but also for the betterment of the country's future.

'Australia is on track to the worst housing affordability levels on record'.- Wakelin (2009)

What does housing affordability mean? The Australian Housing and Urban Research ...

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housing affordability in Australia will also be presented.

A housing market's most important features are price and demand and supply. These are discussed further and graphs are presented in order to aid in understanding their relationship and effect on the housing affordability.

Price

Graph-1

Generally speaking, prices of dwellings had skyrocketed since 2004 until the global financial crisis (GFC) exploding in the late 2008. Shown by Graph-1, the weighted average housing prices of the most expensive suburbs had increased from around 90 index points to more than 115. It reached the peak of approximate 120 in the late 2007. After a small 'V' shape period, the prices started to tumble. Through the year after, the price index fell from its peak to around 107 index points.

Compared with the most expensive suburbs, it is not difficult to tell that the house prices of the others are more stable. In the trend of dropping house price in 2007 and 2008, the other suburbs only ...

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expenditure on durable goods including houses.

Graph-2

[pic]

As we can see from the graph above, the Australian unemployment rate fluctuates quite significantly. The two peaks of unemployment rates were recorded after two Australian economy recessions, which occurred in the early 1980s and the early 1990s. After 2000, the unemployment rate has fallen to around 6%. From 2002 to 2008, the unemployment rate fell by more 3% to the lowest record. As previously discussed, the house prices also reached its peak during this period. Therefore, demand largely increase due to people having stable income partially contribute to the rise in house prices. However, the financial crisis ...

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Added: 4/3/2013 10:16:04 AM
Submitted By: j3nj3n
Category: Economics
Words: 2714
Pages: 10

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