Show me the money: financing more affordable housing

At the recent Notional Summit on Housing Affardability (June 2004) concern was expressed that, over the post decade: ¿ average house prices relative to income have almost doubled ¿ the proportion of first home buyers has fallen by 30 per cent ¿ average monthly payments on new mortgage loans have increased by around 50 per cent the proportion of low-rent dwellings has fallen by 15 per cent ¿ effective opportunities to rent public housing have fallen by about 20 per cent ¿ on any night, around 100,000 Australians are homeless These and other indicators are a clear sign that housing affardability has declined substantially for lower and middle income households in Australia, during a generally buoyant period of economic growth. Clearly, the benefits of a growing economy in an increasingly globalised world are not flowing evenly to all sectors of our society. Deep and persistent failures in the Australian housing market are ensuring that the very mechanisms of growth that are intensifying inequalities in labour markets are being faithfully reflected and reinforced at home. This raises challenges for housing policy makers and advocates. How can this vicious dynamic be halted and reversed? This paper first briefly summarises the housing affardability picture and the forces driving the recent housing boom. The aper then addresses the policy challenge and looks at the way forward. The proposals of the recent summit are noted. Finally, it is stressed that in order to make substantial advances in reducing housing stress related to declining affardability for at-risk groups, the States and Commonwealth must adequately and quickly address and solve the parlous financial condition of the state housing authorities.