Australians struggle to enter property market

Staff Reporter

Australia’s housing affordability problem shows no sign of abating, according to recent figures.

Data from the Australian Bureau of Statistics found residential construction work done fell by 1.1 per cent in the December 2010 quarter.

New residential building work done fell by 1.7 per cent in the December 2010 quarter, following the 5.2 per cent decline in the September 2010 quarter.

On a more positive note, work done on major alterations and additions is again growing, turning in a 2.5 per cent increase for the December 2010 quarter to be up by 6.3 per cent over 2010.

Housing Industry Association senior economist Andrew Harvey said renovations continue to be popular as Australians increasingly look to improve their existing homes rather than face the mounting transaction costs, such as stamp duties, that they will incur if they trade-up to another property.

“Unfortunately Australia’s high property transactions costs do not help the problem of Australia’s undersupply of housing, nor the affordability problems faced by both prospective home owners and those in the market for rental property,” Mr Harvey said.

“Recently the OECD found that Australia has the fourth highest transactions cost on property in the developed world and this situation causes major inefficiencies in terms of locking owners into their existing properties.

“Australian governments need to turn their attention to removing stamp duties on new homes so as to better encourage annual levels of new home building that will help ease the pressure on prospective home owners, particularly young Australians who are really struggling to enter the housing market.”

 

Staff Reporter

Australia’s housing affordability problem shows no sign of abating, according to recent figures.

Data from the Australian Bureau of Statistics found residential construction work done fell by 1.1 per cent in the December 2010 quarter.

New residential building work done fell by 1.7 per cent in the December 2010 quarter, following the 5.2 per cent decline in the September 2010 quarter.

On a more positive note, work done on major alterations and additions is again growing, turning in a 2.5 per cent increase for the December 2010 quarter to be up by 6.3 per cent over 2010.

Housing Industry Association senior economist Andrew Harvey said renovations continue to be popular as Australians increasingly look to improve their existing homes rather than face the mounting transaction costs, such as stamp duties, that they will incur if they trade-up to another property.

“Unfortunately Australia’s high property transactions costs do not help the problem of Australia’s undersupply of housing, nor the affordability problems faced by both prospective home owners and those in the market for rental property,” Mr Harvey said.

“Recently the OECD found that Australia has the fourth highest transactions cost on property in the developed world and this situation causes major inefficiencies in terms of locking owners into their existing properties.

“Australian governments need to turn their attention to removing stamp duties on new homes so as to better encourage annual levels of new home building that will help ease the pressure on prospective home owners, particularly young Australians who are really struggling to enter the housing market.”

 

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