omdok
No Result
View All Result
Monday, August 8, 2022
  • Login
  • Home
  • World
  • Economy
  • Business
  • Markets
  • Tech
  • Real Estate
Subscribe
omdok
  • Home
  • World
  • Economy
  • Business
  • Markets
  • Tech
  • Real Estate
No Result
View All Result
omdok
No Result
View All Result
Home Real Estate

Australia’s soaring house prices are a ticking economic time bomb

June 15, 2021
in Real Estate
152 5
Millennials are finding it more difficult than ever to purchase a home in Australia, according to statistics.

Millennials are finding it more difficult than ever to purchase a home in Australia, according to statistics.

31
SHARES
3.1k
VIEWS
Share on FacebookShare on Twitter
Australians are facing a “ticking economic time bomb” as house prices continue to rise and interest rates are expected to rise in the coming years.

According to a new report from the University of New South Wales, Australia’s household debt has more than doubled over the last 30 years.

In 1990, household debt accounted for 70% of Australia’s Gross Domestic Product (or GDP). By 2020, that figure would have risen to 185% of GDP.

The report, titled Housing: Taming the Economy’s Elephant, urged the Reserve Bank of Australia (RBA) and a Royal Commission to ensure that younger Australians are not burdened by housing costs.

“Australia’s housing policy has exacerbated income and wealth inequality and wreaked havoc on the economy. This is a significant drag on productivity and distorts Australia’s capital investment patterns,” said Professor Duncan Maclennan, the report’s lead author.

“The recent surge in house prices has created a new and troubling dynamic. Price inflation has returned to greater cities and is now affecting regional Australia. This is partly because of the pandemic-driven work-from-home revolution, but also because so many younger Australians can no longer afford the lifestyle they desire as homeowners in the larger cities.”

Australia’s house prices increased 10% in the year to April 2021 and are expected to increase between 10% and 14% in the coming year.

Crowds watch as Auctioneer Tom Papas conducts a property auction at 7 Finlays Avenue, Earlwood.
Crowds watch as Auctioneer Tom Papas conducts a property auction at 7 Finlays Avenue, Earlwood.

When taken together, Australia’s current housing stock is estimated to be worth $8.1 trillion.

Professor Maclennan stated that market regulators are largely ignoring the real-world consequences of exploding property prices on Australians’ day-to-day movements.

“Policymakers must place a higher premium on the economic consequences of housing market distortions. The Commonwealth Government’s policies are increasing inflationary pressures, and the RBA has effectively absolved itself of responsibility for house prices by arguing that higher prices are beneficial to the economy,” Professor Maclennan said.

“However, as people pay more and more for rent and mortgage servicing, they have less and less money to spend on other goods and services.”

The RBA’s responsibilities should be expanded to include the maintenance of a more stable and rational housing market.

Australia’s interest rates are currently at a record low of 0.1 per cent. In February 2020 – just before the virus’s true impact was known – Australia’s official cash rate was 0.75 per cent.

Professor Maclennan stated that while housing supply remains “sluggish,” states must do more to assist younger Australians in entering the market without incurring excessive debt.

“Short political horizons and cross-border and cross-sector blame games will do nothing to assist younger and poorer Australians,” Professor Maclennan stated.

“The magnitude and complexity of the problem necessitate the establishment of a Royal Commission to examine how to defuse the time bomb and create a more effective and equitable market for all Australians.”

Housing economist Saul Eslake explained that rising house prices are not a reaction to COVID developments but rather a result of the way Australia’s property market is structured.

“Recently soaring house prices are alarming the media, as they are pricing more young people out of the market. However, this is not a short-term or cyclical issue. “This is a structural issue that has been growing for decades,” Mr Eslake explained.

“And it is a problem that will not be solved by policy initiatives that merely tweak the edges. “

It has been amply demonstrated that governments must withdraw from policies that serve primarily, or exclusively, to inflate housing demand and instead pursue policies that increase housing supply.”

Tags: Australia

Market News

Julie Bishop is in a video with Hollywood stars for her new job with a mining services company in Perth. The video is for new employees.
Business

Julie Bishop Hollywood heavyweights, wiki bio net worth video Instagram

by adminmi
July 17, 2022
0

Julie Bishop says that a Perth mining services company will give her a new job. In a funny new video...

Read more
Apple just came out with a new MacBook Air that comes in four colors: silver, space gray, new starlight, and midnight.

 2022 Updated features MacBook Air silver, space grey and new starlight and midnight

July 17, 2022
Why is the euro falling dollar parity definition, stock market today

Why is the euro falling dollar parity definition, stock market today

July 12, 2022
Elon Musk has taken steps to cancel his agreement to buy Twitter. But the company is set on making the deal happen anyway.

The case between Elon Musk and Twitter is now in court, $44 billion offer to buy

July 10, 2022
In June, Charif Souki was in London.

Charif Souki tellurian news net worth, LNG plant at Sabine Pass is in Cameron

July 10, 2022
Real Estate

Jada group Sydney construction industry collapses, report Mac Insolvency lodged with ASIC

July 19, 2022

Categories

  • Business
  • Cryptocurrency
  • Economy
  • Gadget
  • Markets
  • Politics
  • Real Estate
  • Startup
  • Tech
  • Uncategorized
  • World

Site Navigation

  • Home
  • Advertisement
  • Contact Us
  • Privacy & Policy
  • Other Links
omdok

About the latest trends in the business world in-depth features on a variety of topics. Focus on the intersection between business and pop culture and between business and politics.

omdok.com © 2021 all rights reserved

No Result
View All Result
  • Advertisement
  • Contact Us
  • Homepages
  • World
  • Economy
  • Business
  • Markets
  • Tech
  • Real Estate

omdok.com © 2021 all rights reserved

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Go to mobile version