Prices for homes in Australia have risen in the first half of 2008, according to the Real Estate Institute of Australia (REIA).
The REIA report that median home prices rising across the country to $A459,216 by June 2008, up a slight 0.05% for the quarter and 6% for the previous year. Despite a decrease in housing prices, Sydney still leads the way with a median home price of $542,000. Of all the major cities, Hobart has the most affordable homes with a median price of $325,000.
One of the reasons for increasing home prices is the continued lack of housing supply to meet the needs of a growing country. This has led to both increased prices and increased rental returns across the country. Vacancy rates are at record lows in most of the major cities, and shows little sign of improving so long as the shortage of housing stock remains.
Australia’s population is increasing rapidly, growing by around 330,000 new residents, with both overseas migration and the level of natural increase at historic highs. At the same time, the number of new dwellings being built per year at 157,000, well below the 200,000 estimated to be required, and increasing the distance between supply and demand.
So, perhaps an idea from Florida could easily be implemented here in Australia.
Florida Governor Charlie Crist recently signed an Executive Order that opens up $US571 million in state-backed financing for developers and buyers of real estate to access, in an effort to take the sting out of the economic problems that have hit the state and its real estate industry.
The order is designed to encourage developers to start building new homes and apartments, and for reluctant buyers to purchase them. Quite simply, the money will be made available to provide property developers with a line of relatively cheap credit. Furthermore, home buyers can use the state backed financing to get low interest loans through the Florida Housing Finance Corporation.
So not only will the affordability of housing be improved by an increase in stock and more affordable loans, but the wheels of the building industry and thus economy will keep on turning.
Australia has introduced a number of Federal policies recently to assist in the property shortage, but maybe by implementing such an idea from Florida would help more rather than exacerbate the problem. Simon Turner