A non-profit company has released the results of a poll gauging what the public believes about the current property climate, including how many Australians believe they have no other choice but to rent.
The Australian Futures Project, under its WTF Australia? (What's the Future, Australia?) competition, has revealed the current public perception on housing affordability and renting.
The poll, with questions designed by Galaxy Research, had a sample size of 1,515 across capital and non-capital city areas, and was then weighted with age, gender and region to reflect the latest ABS data on population.
Affordable housing is a high priority for Australians, third at 46 per cent of respondents. It is behind energy costs at 70 per cent, and terrorism and security at 48 per cent. And 75 per cent said that housing affordability has had an impact on their lives in some way.
Mortgage holders also said that they were feeling an impact, with 48 per cent saying that they had to cut back on other expenses to afford their mortgage, and 50 per cent said that mortgage repayments are impacting their budget.
As housing affordability prevents more people from buying houses, renters were one of the biggest groups being affected, with only 4 per cent of renters seeing renting as a choice, which implies that the other 96 per cent feel that renting is the only option available to them. Further, 50 per cent see home ownership as unavailable, and renting being a long-term solution.
Rents are also viewed as putting pressure on tenants’ wallets, with 55 per cent cutting back on other expenses to afford their rent, and 70 per cent saying that their rent is putting pressure on their overall budget.
Millennials were another one of the biggest groups said to be impacted, with 82 per cent feeling affected by housing affordability issues, in comparison to 69 per cent of Generation X and 47 per cent of Baby Boomers.
The major factor affecting housing prices was thought to be foreign investors, with 60 per cent of respondents believing so, followed by over-population increasing demand and investors taking on board negative gearing.
Yet despite the high prices, only 15 per cent believe that housing affordability will lead to a crash, while 37 per cent expect the market to stabilise and 43 per cent see prices rising in the future. A large number of mortgage holders feel that they would be hurt by falling prices (40 per cent) while 56 per cent said they would benefit.
In order to address housing affordability, 56 per cent of respondents said that the government should reduce stamp duty, 48 per cent said that it should provide first home buyer grants and 43 per cent said that it should put in place measures to keep interest rates low.
Next was limiting the gains investors would make through negative gearing at 38 per cent.
However, Dr Fiona McKenzie, co-founder and director of strategy of the Australian Futures Project, said that there should be more investing — not less — to solve the housing affordability issue.
“They’re a part of the solution as well, as the setting at the moment might be part of the problem, but I don’t think we would want investors to disappear,” Dr McKenzie explained.
In order to address the issue at hand, Dr McKenzie said that more education is needed on all sides of the spectrum — potential property owner and government.
“I think there's more that can be done to ensure that people have a good understanding of the current policy,” she said.
Even with a sound understanding of the current policy, there is still work that needs to be done, according to Dr McKenzie, such as first home buyer grants.
She said: “First home buyer grants, in some cases, I think there have been, there's so many constraints in how they're implemented, but often, they’re not fit for purpose for a lot of people.
“For example, in NSW, it's for people building new homes, or under a certain cost, most of which won't apply in some of the most expensive markets, so first home buyers are not going to be able to build a new home in the centre of Sydney, you know, there's things like that.
“The whole point of WTF [Australia] and the whole reason we chose this topic is we think it's a really good chance to help break down some of the misunderstandings, misconceptions, but also strengthen the conversation between decision makers and the public.”
Iif investors think they have an idea to start fixing the housing affordability crisis, WTF Australia is also accepting ideas, with a prize of $500 for the idea of the week, and is offering a grant between $5,000 and $25,000 through an organisation to help see that idea through.