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Rapid house price growth sparks call for reform

Perth's residential property market has cemented itself as the standout performer across capital cities, prompting calls for government intervention to make housing affordability a priority as prices continue to rise.

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It's a bloody disgrace that the state and federal government politicians aren't vocalising the stress housing affordability is causing. Why are our pols looking after those profiting from house price increases instead of looking after those wanting affordable houses? Is it because our gov. knows that if they introduce policies that see a 30% reduction in house prices (to make them more affordable) the pols will fear less votes? The banks will cry about it and withdrawal the banks funding of their campaigns? Smalls of corruption. The 'special interests' are first, housing affordability is not a special interest anymore.

The hysteria that surrounds affordable housing is misguided. Every time someone mentions a median house price the comment is made that it is just impossible for our young to get into a house. It is assumed they cant afford the median house price and that is probably correct for many of them. The fact is that median house prices represent the middle of house prices. If the average time a family owns a house is say 40 years the median of that would be 20 years. So the expectation of owning a median priced house would be after 20 years of home ownership not your first house. A recent search of Realestate.com showed 7791 houses and apartments in WA under $350,000. Way below the median house price. The truth is that there is affordable housing for those that are prepared to live where the affordable houses are. Many young people expect too much in their first home. People should be reminded that 60 or 70 years ago Subiaco was an undesirable working class area and Floreat Park was s fringe suburb with no houses or roads between it and the ocean. The point is that as a city grows fringe suburbs grow in desirability and hence in value.If young home buyers lower their initial expectations housing is available.

The underlying issue here is the assumption that high house prices is a good thing not 'young peoples' expectations. High house prices cause debt, create ghettos and divide a population. I would support some government intervention in the housing market as a calming measure on what is a skittish and still over priced market.

Brian, At these prices Australia has a Housing Bubble. I don't see how any sensible person can deny it is bubble particularly after seeing what has happened in Ireland and Spain. Prior to the GFC both Ireland and Spain had very levels of government debt, appranhently very strong economies but sky high housing prices which sustained through borrowing massive amounts of money from overseas through the countries banks. After the GFC hit and housing prices crashed the banks needed to be bailed out and government debt went sky high. The housing bubble will burst just as soon as China stops paying unrealisticly high prices for our minerals. The frightened looks on every bodies face when iron ore prices fell below $90 a tonne should have told you this and the fact that it would be very, very ugly. But it doesn't need to be like this, if we reform our banking sector, reform our housing industry, support our manufacturing sector and put sensible controls on the flow of foreign capital and foreign ownership we can escape the worst features of bubbleonomics.

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