Latest news with #housingaffordability
News.com.au
3 hours ago
- Business
- News.com.au
Home prices expected to lift for remainder of 2025
REA Group Senior Economist Eleanor Creagh says home prices are expected to continue to lift for the remainder of 2025. Ms Creagh told Sky News Business Reporter Ed Boyd that housing affordability is still 'pretty stretched'. 'Lower interest rates have lifted borrowing capacities, boosted by sentiment.'
Daily Telegraph
a day ago
- Business
- Daily Telegraph
Locked out: Generation faces housing crisis catastrophe
Australia's housing affordability crisis has reached code red status as runaway construction costs threaten to permanently lock out a generation of potential homeowners. A new analysis reveals a construction sector in turmoil, with renovation expenses surging a staggering 43 per cent since late 2019 and building material prices remaining stubbornly elevated, sitting 35.4 per cent above pre-pandemic levels. The crisis, driven by a perfect storm of crippling labour shortages, supply chain disruptions, and soaring prices for essential materials is prompting urgent calls for government intervention to prevent a full-blown housing catastrophe. Exclusive data by the Housing Industry Association shows essential materials are bleeding budgets dry, with the cost of copper pipes and fittings skyrocketing by 14.4 per cent annually and 63.4 per cent since the end of 2019. The cost of electrical cable and conduit are equally alarming, jumping 9.5 per cent annually and a shocking 69.7 per cent since the end of 2019. Even the humble clay brick, a cornerstone of Australian construction, has surged by 8.3 per cent annually and 48.4 per cent since the end of 2019, while timber doors rose by 7.4 per cent annually. RELATED 17,000 ads: Aussie tradie jobs no one wants Demolition dilemmas: Aus homes under threat Build new for less: Top spots under $850K revealed Only materials like plywood, steel beams, plastic sanitary ware, reinforcing steel, sheet metal and other electrical equipment saw a reduction in cost between 4 per cent and 9 per cent. However, it's a drop in the ocean, considering the cost of skilled labour, which saw a 5.5 per cent increase over the 12 months to March, with those looking to build now paying 35.5 per cent more for a home than they did pre Covid. To put it in numbers, the average national build cost now is $484,315, according to March figures by the Bureau of Statistics, $18,832 more than the previous year and $152,969 more since pre-Covid in 2020, when the average build cost just $331,346. HIA senior economist Tom Devitt said while the numbers looked bleak, the cost of construction material was starting to stabilise. 'Some of the numbers shared do show a few materials are still going up really rapidly…but the average building materials have actually really slowed. They are still very much elevated from five years ago but they do look like they've stabilised. 'Labor costs are also still increasing quite rapidly but also not as much as they did three years ago. Our trade report two or three years ago had a single year where trade prices went up 10 per cent.' Mr Devitt said while the cost of materials would come down with time, the real concern going forward was ongoing labour shortages. 'The demand is still going to be outstripping the supply of trades unless the government follows through on what they've been paying lip service to in terms of fast tracking in-demand construction trades,' he said. '(So far) nothing has really progressed from that because the number of skilled trades that have been arriving, relative to overall overseas arrivals, has been minute.' The hidden cost behind Australia's homebuilding struggles An analysis by NextMinute, a leading project management software for tradies, recently shed light on the occupations with the highest vacancy rates and the most job ad listings across Australia, revealing a stark disparity between supply and demand in the trade sector. Official figures indicate that motor mechanics, electricians, and welders are among the most sought-after trades, with thousands of vacancies across all Australian states. However, SEEK job ad volumes suggest the demand is far greater, with listings for electricians alone exceeding six times the official vacancy count. Similarly, there are 9749 listings for mechanics and 2706 for welders, reflecting widespread recruitment challenges in the industry. Despite attractive salaries, several trades remain under-represented in global job searches, such as airconditioning and refrigeration mechanics, who earn over $2000 per week. The United Kingdom leads overseas demand, with UK-based workers conducting thousands of monthly searches for Australian trade jobs. NextMinute CEO Alex Jenks said the discrepancy highlighted the ongoing recruitment challenges faced by trade businesses. These shortages are slowing down projects, driving up costs, and putting pressure on business owners,' he said. 'Interestingly, the countries showing the most interest don't always align with the trades in greatest need. 'For example, airconditioning and refrigeration mechanics have over 500 official vacancies, but little international search activity, pointing to blind spots in global awareness of Australia's workforce needs.' Australia needs to think modular With Australia forecast to fall 262,000 homes short of its national 1.2 million housing target by 2029, Ray White Group senior economist Nerida Conisbee said a modular approach was needed to address ongoing construction concerns. 'It's taking things like trusses off site and making it more of a manufacturing process, as opposed to building them on site where you need far more skilled labour,' she said. 'Another example would be kitchens and bathrooms which are really time consuming and expensive to build on site. So if you just have to assemble them within a house, that makes it a lot cheaper…everything else can be done offshore. 'Another thing to look at would be the way we design houses. One of the reasons why it's so expensive to build is because Australians really love their houses to be different from their neighbours. 'And so, if we're looking at new areas, if we're starting to build houses that are very similar, then it becomes a lot quicker and cheaper to build houses.'
Yahoo
2 days ago
- Business
- Yahoo
Manitoba premier 'needs to fulfil his promise,' pass legislation on above-inflation rent hikes: advocates
A housing advocacy group has served Manitoba Premier Wab Kinew a warning — in the form of a "notice of termination" caution — saying he has breached his contract with Manitobans by failing to pass legislation on above-guideline rent increases. The "notice of termination" letter from the Right to Housing Coalition — written to mimic the termination forms that landlords can present to tenants before an eviction — was presented by demonstrators during a rally outside Kinew's constituency office in Winnipeg on Friday morning. "He needs to fulfil his promise to Manitobans," Yutaka Dirks, a member of the coalition, said at the rally. "He needs to fulfil his promise … [on] rent regulation, to keep housing affordable." Provincial rules set a cap on how much landlords can increase rent each year (currently 1.7 per cent), but landlords can apply for larger increases, if they can demonstrate they've incurred costs that the guideline amount won't cover. Critics have said it's too easy for landlords to get that approval. While in opposition, the NDP presented a private member's bill in 2021 that called for the Residential Tenancies Act to be changed to include stricter rules to limit rent increases beyond the province's guideline. The then Progressive Conservative government didn't support it. During the campaign that led to the NDP's election in October 2023, Kinew promised an NDP would limit landlords' ability to apply for rent increases above the cap. Last year, the NDP introduced a bill that would set conditions for above-guideline increases, limiting them to cases where landlords face a sharp rise in taxes, utilities or security costs, or where they invest in capital projects such as plumbing and heating. At the time when it was introduced, the bill was hailed by the government as a way to ensure increases aren't approved for cosmetic improvements to properties. However, the bill hasn't been passed, and the Right to Housing Coalition said the government has let it die. "We don't have any legislation in the second session for a second year," Les Scott, a member of the West Broadway Tenants Committee, said at Friday's rally. With the spring sitting coming to an end at the Manitoba Legislature, the bill could have to wait months until it can be introduced again. Scott fears that might not happen until next spring at the earliest. "That's two and a half years after they got elected," he said. "Wab Kinew has to keep his promise, or he has to go." 'Renters feel it' Even though the legislation didn't include fixes to close all rent regulation exemptions, Dirks said passing the bill would have made a "huge" difference to tenants and renters. "We were honest when we said we were excited by the legislation," he said. The idea behind letting landlords increase rent above guidelines is, in theory, to help them recoup costs from investments in the property where tenants live, said Dirks. But after the expenses are covered, the rent often doesn't go down, making the increase a way to turn profits, he said. "We renters feel it the first of every month when the rent is due," he said. "This is something that the premier can [fix] that will cost their government almost nothing. It's a legislative change." Mintu Sandhu, Manitoba's minister of public service delivery, told CBC News in an interview his government is reviewing the Residential Tenancies Act to see what can be included or changed to protect tenants, but he didn't comment directly on the legislation the NDP introduced last year. "I want to make sure whatever we are introducing, what we are passing is benefiting the folks that will benefit," he said. Sandhu said he will meet with the Right to Housing Coalition on Monday to get feedback as part of the review process. "Our government is committed to ensuring that Manitobans have access to safe and affordable housing," he said.
The Guardian
2 days ago
- Business
- The Guardian
‘It's a shock': if you think Adelaide housing is affordable, think again
When people think of Adelaide, they may ponder its good food and wine or its many churches. Historically, it was viewed as a well-priced place to live and work. But years of surging property prices have made it less affordable than some of the world's most famous cities, including London and New York, when income levels are factored into living costs. Even those with a front row seat to the change have trouble comprehending it. 'It is a shock for someone like myself, who was born and bred here and always thought of Adelaide as being one of the most affordable places to live with the quality of lifestyle that we have,' says David King, a property agent who assists buyers entering the market. 'The traditional first-time buyer is now being priced out of houses and that has led to a quite large increase in unit prices across Adelaide. Now even a unit is becoming out of reach.' King, a buyer's agent at property group Cohen Handler, says prospective buyers in Adelaide are frustrated. 'There are people who come to us often through a level of frustration that they've been out there looking and missing out on so many different properties. They are just sick and tired of being out there every weekend.' Adelaide is the sixth least affordable metropolitan market listed in the recent Demographia International Housing Affordability report, which measures housing costs to income in 95 markets across eight nations. The South Australian capital, which is less affordable than global cities such as San Francisco, Chicago and Toronto, is now Australia's second-least affordable city, after the perennially expensive Sydney. While Hong Kong is at the top of the list, it is suffering from a depressed housing market, in a trend that will probably soon give Sydney the unenviable title of world's most unaffordable city. Demographia blames a global affordability squeeze on governments using urban containment strategies, which it defines as a focus on densifying housing within city boundaries as opposed to expansion. Australia has also been gripped by concerns that state and federal government policies are fuelling demand through their policies, without adequately addressing supply. While housing affordability across the country deteriorated during the Covid pandemic, as wages fell behind rocketing home values, most of Australia's major cities have been expensive for decades. Some of the biggest price gains occurred in the late 1990s and early 2000s, with near double-digit annual percentage gains, backed by the 'increasingly significant role' of investors pumping up demand, as noted by Treasury at the time. This coincided with the Howard government's 1999 decision to reduce capital gains tax for investors. Home prices as a multiple of Australians' incomes have more than doubled since 1980, according to the OECD's measure. The same figure has only risen by half as much in the UK and barely moved in the US. Sign up for Guardian Australia's breaking news email Prof Hal Pawson, an expert in housing policy at UNSW, said that affordability has deteriorated faster in Australia than in most comparable countries as bigger tax exemptions allow investors and owner-occupiers to pour more money into the sector. 'Australia's a country that, probably to a greater extent than even other anglophone countries, has an obsession with property as a place to put your money,' Pawson says. Geography also plays a part. Australia's layout and remote centre mean people congregate towards big coastal cities, contrasting with the more common practice across Europe and the US of inland cities. Adelaide, now less affordable than the more heavily populated Melbourne, is a good example of a city being squeezed by its terrain, given that it is locked between the ocean and the hills. Recent coverage of Australia's housing crisis has focused on soaring demand and sluggish supply of new homes, with growing city populations held back by rising construction costs and lengthy project approval processes. But in Germany, which also faces those issues, incomes have grown faster than home prices over recent decades, making property more affordable. Housing enjoys fewer tax breaks in Germany, while rent caps and stronger protections for tenants mean much of the population is happy to rent long-term. Christian Danne, a Berlin-based economist, says price-income comparisons hardly apply because half the population isn't looking to buy a home. 'Ever since the 1950s, it's a renters' market,' he says. 'The most prized possession in the UK and Ireland is your house, but for a very long time in Germany, the most important status symbol was your car.' More than half the German population rented a home in 2024, whereas only about a third of Australians are tenants. Amid a shortage of housing stock, rents for new tenants have been rising fast in Germany, putting pressure on young people and migrants entering the market. But those already settled into a rental are usually spared the steep increases. 'Price increases are very predictable once you're living in a place, so there's literally no incentive to buy and own a place other than personal preference,' says Danne, a consultant at DIW Econ. Australia has seen bigger hikes in both existing and new rent costs in the last five years, with average rent prices up nearly 20% and the advertised price of new rentals up nearly 50%. Affordability advocates in Australia are focusing their attention on rental rights, which are a state issue. The thinking is that improving tenancy rights may lower the value of rental properties and depress rental prices, easing affordability at the expense of landlords, as it does in some overseas markets. Bruce Djite, the South Australian executive director at the Property Council of Australia, says Adelaide's past affordability advantage has been 'completely eroded' and policymakers aren't reacting by increasing supply fast enough. 'We are not acting like we're in a crisis [but] a lot more needs to be done,' Djite says. 'If we continue on like this, we will get a reputation for not just being unaffordable, but being completely inaccessible.'
Fast Company
3 days ago
- Business
- Fast Company
This startup wants to give you money to buy a house
Potential buyers in California have seen the daunting challenge of owning a home become even more difficult. Due to higher mortgage rates and increased home values, a recent report from the California Association of Realtors found that buyers needed an income of $218,000 to afford a median home, a figure that's jumped 82% since 2019. A Canadian startup seeks to make those figures a little more favorable, especially for working class and first-time buyers. Zown, which opened for operations in California in the fall, offers buyers what it calls down payment assistance. The model works like this: By using automation and salaried showing agents to help facilitate deals, it can reduce commissions that usually account for 2.5% or more of a home's purchase price to about 1%, offering the difference as a rebate to buyers to use toward a down payment or to cover closing costs. Zown was launched by Canadian entrepreneur Rishard Rameez, who documented his own struggles with housing affordability on a viral Reddit thread. He found the process laborious and expensive and, in 2021, started working on a way to simplify the transaction. He developed a model that uses automation and a team of salaried brokers to cut commission fees and pass those savings along to buyers. He said Zown is able to give back roughly $10,000 to $15,000 per buyer for down payment assistance, an amount that equaled what an average person could save in a year or two.
