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The rising cost of housing is a growing issue in Victoria and much of the eastern seaboard in Australia. No longer confined to planning seminars and not for profit groups, our newspapers and social media feeds are peppered with discussion about housing affordability and the perils of smashed avocado.
ratio: has decided as a collective group to explore the issue of affordable housing and bring this debate to our clients, peers and the development community. We will, over the next couple of months, contribute and add to the debate and most significantly, suggest solutions.
The challenge of buying a home or security of tenure through quality rentals has been a growing issue for some time. Baby Boomers may bemoan the ‘I want it all now’ attitude of Millennials and argue that there is no housing affordability crisis, but the figures don’t lie. Since 1970, Australia’s median house price has risen almost four times whilst wages have only doubled, making housing twice as expensive as it was nearly 50 years ago.
We know there are many factors that influence housing affordability. Some are obvious, such as an insufficient supply of housing due to a range of factors, including the ‘missing middle’, the urban growth boundary and restrictive planning controls. This lack of supply is exacerbated by an increase in demand for dwellings, as well as more diverse housing stock, driven by population growth, immigration and the changing shape of our households.
Other factors are less obvious but play an important role in the pricing of housing. Taxation, falling interest rates, first home buyer grants and foreign investment just to name a few. Whilst outside the sphere of influence of planners, understanding their effect on housing prices is part of the affordable housing debate in our industry.
Whilst prices have begun to soften for the first time in a decade, we need to proactively pursue making housing affordable again. Just as infrastructure provision lagged behind population growth in Victoria for the past 20 years, we shouldn’t be complacent about housing affordability by what is likely to be a temporary adjustment in housing prices. A whole generation of young people are at risk of being disenfranchised from housing security and this includes a number of our own staff: well-educated, intelligent young people on good professional salaries who are unable to buy a home (whether it be a townhouse, apartment or standalone dwelling) within any reasonable distance from work.
We are excited at the prospect of tapping into the energy and enthusiasm of the ratio: team as we explore some of the key factors that contribute to housing unaffordability and look forward to offering some innovative solutions. The end of our series will culminate in an interview forum with key industry leaders to test out these solutions and see if they have real world application.
So why should you follow us and participate in our exploration of this issue? Perhaps you share our concern about social justice and an acknowledgement that the security that comes with housing tenure brings stability, social connectiveness and wellbeing to our communities. Are you concerned about the ability of your own children to enter the housing market, whether it be to buy or rent?
Or perhaps you see a business opportunity to tap into affordable housing as a new business model given the strong demand for a different price point? Is Build to Rent catching your attention but not sure how it works, but the attractiveness of long term revenue streams is appealing?
Whatever your reason, please join us as we explore housing affordability over the next couple of months. We welcome your participation in the ongoing discussion and can’t wait to hear your feedback on the solutions offered.
Author: Colleen Peterson, ratio: CEO
HOUSING AFFORDABILITY GLOSSARY
There are a number of terms used throughout our Housing Affordability series that have multiple interpretations. For the purposes of clarification, we've put together a glossary of terms as we've used them.