Home buyers know only too well the emotional rollercoaster of searching for a new property.
Step one: excitement rises as you check out properties online.
Step two: disillusion creeps in at overcrowded open for inspections.
Step three: utter frustration sets in when you realise you’re nowhere near the mark on auction day.
Repeat steps one to three again and again, until you’re ready to put the whole thing in the too-hard basket.
For low-income earners, finding affordable housing is even harder. An estimated 30 per cent of Australians live in rental homes or rely on community housing.
Finding a solution to Australia’s sky-high property prices is something politicians and economists are struggling to do. Treasurer Scott Morrison last year admitted the $11 billion used to fund government housing was not being spent efficiently.
One initiative aims to increase social housing supply while helping retirees boost their nest eggs. In a submission to the Federal Government’s Affordable Housing Working Group, Industry Super Australia proposed investing in social housing to shore up returns for its members at the same time as improving outcomes for low-income earners, particularly retirees.
Provided the government creates the right framework for the initiative, ISA chief economist Stephen Anthony says it could make a world of difference for those struggling to break into the property market.
“Quite clearly house prices, especially around cities, have risen dramatically over the last decade and in particular, over the last five years and that means over the lower end of the spectrum affordability issues are really pressing,” he says.
“If the federal government can put in place a vehicle through which superannuation funds can invest in public or social housing options in ways in which these developments can be affordable, so they generate an adequate rate of return for members, Industry SuperFunds are ready to jump on board.
“There’s a great willingness on behalf of Industry SuperFunds to set aside some portion of assets for this purpose where returns are viable.”
Australia’s property market prices are red hot and despite talks of an imminent bubble burst, they have risen steadily in the past 10 years. The median house price in Australia rose by 3.4 per cent last year to reach $780,887, according to Domain.
Prices are so out of reach, Sydney’s market was labeled “severely unaffordable” in the Demographia International Housing Affordability Survey. It is one of the 10 least affordable cities along with Melbourne.
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