The housing market is experiencing a “new normal”, where households have low gearing and are saving more. And it’s unlikely to change in the medium term, meaning a rebound in house prices will be put on hold. That’s all according to a report by JPMorgan and Fujitsu. Furthermore, the report expects that the subdued state of the housing finance market will reduce tax intakes for governments, compounding the problem. Fujitsu warns against policy makers introducing incentives to kick-start the housing sector, saying it won’t be beneficial in the long term.
And RP Data reports Australia’s unit market represents one of the best entry level property ownership opportunities for buyers. According to the data, across capital cities, 18 per cent of suburbs have a median unit price below $300,000, with almost 60 per cent of all suburbs sitting in the $300,000 to $500,000 range. RP Data analyst Cameron Kusher says affordable price points close to a city centre is one of the key reasons why demand for inner city apartments is on the rise. Mr Kusher anticipates the inner city will continue to be built up, driven by strong demand to live close to the CBD, with the cost of buying a house prohibitively expensive and the lack of good infrastructure in the outer suburbs of most capital cities making it more desirable for people to live in units close to the city.
Talking about that lack of infrastructure, the Property Council of Australia has launched a new “Make My City Work” campaign. Chief executive Peter Verwer questions how much productivity there is when you’re sitting in a traffic jam for an hour. Or how we can improve participation rates when mums and dads can’t easily find a childcare centre to drop the kids off before work, and when they do find them there aren’t enough. The campaign suggests state governments be financially rewarded for reducing traffic congestion, easing housing shortages and increasing the number of childcare centres to create a productivity super cycle.
