High housing prices are causing Australia to become a nation of renters, according to the chairman of MacroPlan Dimasi, Brian Haratsis.
“Australia now has the highest housing prices in the world because of government inaction, chaotic town planning regulations and kilometres of red and green tape,” he said.
“The high prices discourage first home buyers from entering the market and drive high rental costs. Urban fringe land and housing underpin prices and rentals for metropolitan areas.”
According to MacroPlan Dimasi research, over 90 per cent of the real increase in new housing prices was due to increases in land prices. Other factors were federal, state and local government taxes on development, gold-plated development standards and the under provision of infrastructure.
Senior economist for Australian Property Monitors Andrew Wilson told Real Estate Business he disagreed with the forecast.
“Aspirations for home ownership are as strong as ever. What we are seeing are fluctuations in the housing market,” he said.
“I think there are certainly markets like Sydney that represent barriers to buyers, but we are seeing other markets such as Perth that don’t represent barriers to first home buyers, which are the key signal for how accessible housing markets are.
“At the moment in Western Australia we are seeing first home buyers make up 23 per cent of all housing loans being approved, and that is the highest of all the state markets.”
Dr Wilson explained that supply and geographical constraints were contributing to higher costs and more competition for Sydney’s properties.
“Sydney is the key market where we may see an increase in rental verses buying over a period of time," he said, "but I think other cities will maintain that really good balance that Australian markets have: 70 per cent home ownership and 30 per cent aspiring or trying to break into the home market but renting in the mean time.”