The latest Australian Residential Development Outlook forecasts that 180,000 new homes will be built by June next year – about 30,000 more than the average of recent years.
But this is still not enough to meet demand.
Meanwhile, house prices continue to rise, with Canberra property values growing by 2.5 per cent over the winter quarter.
Canberra’s median dwelling price now stands at $510,500 – surpassed only by Sydney, Melbourne and Perth.
The International Monetary Fund recently ranked Australia as the third least affordable place in the world to buy a house – behind only Belgium and Canada.
It’s been said many times that no one complains when their house price goes up.
But with parents increasingly using the equity in their own homes to help their children get a foot on the property ladder, perhaps this is no longer true. Some research suggests that one in three first home buyers get their house deposit from their parents.
Escalating house prices aren’t good for anyone – for individual families, for the community or for a government trying to balance the budget.
Without affordable housing Canberra cannot attract skilled workers, new families or young people. This directly affects our city’s growth and economic viability.
The ACT Government has taken some steps to create more affordable housing in Canberra. But there is still more to be done.
We need to think more creatively about how to improve affordability. Reinventing some of our vacant commercial offices as residential space could be one option. Another is to open up greenfields sites to the private sector to develop, adding competition and choice into the market.
In 2007, the Property Council of Australia sent plastic bananas to state and federal MPs with a cheat sheet on housing affordability. Evoking Cyclone Larry, which devastated fruit farms in Northern Queensland, we reminded politicians of the basics of ‘banana-nomics’: when there is a shortage, the price goes up.
But while you can forego your daily banana smoothie, everyone needs a roof over their head.
Catherine Carter is ACT Executive Director of the Property Council of Australia