A fortnight ago, we heard from the Prime Minister Ms Gillard taking about how “many Australians miss those days when they could spend all of their income, see wealth increase through ever-rising house prices, and through easy credit, borrow against the house again to spend more.”
Last Friday, it was the newly appointed Minister for Housing and Homelessness, the honourable Mark Butler’s turn to expand some more on the housing position here in Australia. Barely 5 days with the new portfolio, Mr Butler was invited to talk at the opening of the UNO Apartments Social Housing Initiative in Adelaide about the challenges of affordable housing.
This is some of what he said:
But the challenge of providing affordable housing, if anything has intensified in recent times, particularly over the last 10-15 years. We saw across western countries, particularly after the dot com bust when cheap money was looking for a place to go, an extraordinary rise in housing prices across the west, including here in Australia. Across the world, the asset increase amounted to around $30 trillion, US dollars, the largest asset bubble in human history.
We saw housing price/rent ratio, a measure of true housing value, and the ratio of prices to average incomes soar across the western world, including here in Australia. In the mid part of the last decade, Australian house prices had a rent ratio about 70 per cent higher than their long-term, or their 25-year average. What that did, was to price many Australians out of the market, price many Australians out of being able to get in to housing for the first time as purchasers, particularly younger Australians, but also older Australians who might be experiencing late in life separations, having to divide one house into two.
The Global Financial Crisis had one benefit and that was to start to moderate the housing asset bubble across the west; indeed in some countries it saw housing prices collapse. Here in Australia, we have seen a moderation in housing prices, partly because of economic conditions, but also because of some government policies, which I want to talk about.
He indicated “Government policy has been an important contributor to that moderation in the housing affordability crisis here in Australia,” choosing not to dwell on past disastrous “affordability” policies such as Rudd’s First Home Owner’s Boost, but to talk about the Social Housing Initiatives and National Rental Affordability Scheme (NRAS).
In summing up, Mr Butler said “This is a very important thing that the Australian Government has done, particularly to take advantage of those moderating economic conditions to start to puncture that extraordinary housing affordability crisis that confronted Australia over the last 10 or 15 years. I’m very pleased to be in this Ministry. I see it as an incredibly important contributor to social justice in Australia, but also to economic productivity and prosperity.”
» Launch of UNO Apartments Social Housing Initiative, delivered in Adelaide, 8 February 2013 – The Hon Mark Butler MP, 8th February 2013.
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