Median house price surges past $500,000
Date: March 8, 2010
Publication: Sydney Morning Herald (subscribe)
The median house price in Brisbane has topped $500,000 for the first time, signalling a strong recovery of the property market in the wake of the global financial crisis.
But this prosperity will see more people forced to relinquish their dreams of home ownership, with housing affordability in the Sunshine State set to worsen, financial analysts say.
Figures released yesterday by the Real Estate Institute of Queensland showed that the median house price for a three-bedroom house in Brisbane rose 8.1 per cent to $535,000 in the three months to the end of December 2009.
In 2004, 102 suburbs across greater Brisbane, including Moreton Bay, Ipswich and Logan, had a median house price below $300,000.
Now there are 25. Only seven of those suburbs are in Brisbane, including Inala, Acacia Ridge, Doolandella, Durack, Rocklea and Zillmere.
In 2004, there were only 23 suburbs with a median house price above $500,000. Now there are 99.
Chamber of Commerce Queensland general manager of policy Nick Behrens said the likelihood of home ownership for potential first-home buyers in Brisbane was becoming more remote.
''The prospect of home ownership is becoming a distant reality for a sizeable proportion of the population,'' Mr Behrens said.
He said the appreciation in house prices was due to rapid population growth in South-East Queensland outstripping available housing.
''The key issue here is supply and demand,'' he said.
The figures showed affordable housing stock has diminished in Brisbane, but REIQ managing director Dan Molloy said affordability had somewhat improved as a result of the global financial crisis.
''It's cold comfort to first-home buyers, but affordability is still better than what it was in 2008 when interest rates were high and it was taking up to 40 per cent of the median family income to service a typical mortgage.
''Interest rates, whilst they're on the way up, are still a long way from where they were.''
However Infrastructure Australia's inaugural State of Australian Cities 2010 report, released last Friday, revealed that average house prices in capital cities have increased to the equivalent of over seven years of average earnings - up from three years over the post-war period to the 1980s.
The prospect of home-ownership is therefore grim for low-income earners in suburbs south of Brisbane, including Kingston and Woodridge, where workers were taking home average annual wages of $31,521 and $31,552 respectively mid-way through 2007.
According to the Australian Bureau of Statistics the average household income in Brisbane in the same year was $41,720.
''The pressures on affordability are a function of strong demand and limited supply driven by strong population growth underpinned by a range of factors: higher immigration rates; a decline in standard home loan interest rates from the mid-1990s; and greater availability of credit,'' the State of Australian Cities report said.
But Queensland Council of Social Service president Karyn Walsh said the rental trap was of most concern, with a 17 per cent rise in weekly rental costs nationwide since 2000.
She said Brisbane suburbs with traditionally low rental prices had suddenly surged forcing families to move further away from the city and vital health and education services and abandon their plans for home-ownership.
''The worst case scenario is that they end up homeless and are sleeping in cars or with friends and relatives until they can find other accommodation,'' Ms Walsh said.
She said it was not uncommon for two families to share a house in order to afford the weekly rent and utility bills.
''We've seen up to 10 children living under one roof in suburbs including Holland Park, Mt Gravatt and Stafford.''
She said the impact of housing affordability on children was often overlooked.
''Children are affected by housing instability greatly. There is the constant trauma of moving, packing up their belongings, and losing things that are dear to them.
''Worse, it greatly disrupts their school life.'' Ms Walsh said worsening housing affordability was the consequence of prosperity.
''Unless governments pay attention - because the market doesn't - to people who are the most disadvantaged then we will see poverty rates get higher.''
Date: March 8, 2010
Publication: Sydney Morning Herald (subscribe)
The median house price in Brisbane has topped $500,000 for the first time, signalling a strong recovery of the property market in the wake of the global financial crisis.
But this prosperity will see more people forced to relinquish their dreams of home ownership, with housing affordability in the Sunshine State set to worsen, financial analysts say.
Figures released yesterday by the Real Estate Institute of Queensland showed that the median house price for a three-bedroom house in Brisbane rose 8.1 per cent to $535,000 in the three months to the end of December 2009.
In 2004, 102 suburbs across greater Brisbane, including Moreton Bay, Ipswich and Logan, had a median house price below $300,000.
Now there are 25. Only seven of those suburbs are in Brisbane, including Inala, Acacia Ridge, Doolandella, Durack, Rocklea and Zillmere.
In 2004, there were only 23 suburbs with a median house price above $500,000. Now there are 99.
Chamber of Commerce Queensland general manager of policy Nick Behrens said the likelihood of home ownership for potential first-home buyers in Brisbane was becoming more remote.
''The prospect of home ownership is becoming a distant reality for a sizeable proportion of the population,'' Mr Behrens said.
He said the appreciation in house prices was due to rapid population growth in South-East Queensland outstripping available housing.
''The key issue here is supply and demand,'' he said.
The figures showed affordable housing stock has diminished in Brisbane, but REIQ managing director Dan Molloy said affordability had somewhat improved as a result of the global financial crisis.
''It's cold comfort to first-home buyers, but affordability is still better than what it was in 2008 when interest rates were high and it was taking up to 40 per cent of the median family income to service a typical mortgage.
''Interest rates, whilst they're on the way up, are still a long way from where they were.''
However Infrastructure Australia's inaugural State of Australian Cities 2010 report, released last Friday, revealed that average house prices in capital cities have increased to the equivalent of over seven years of average earnings - up from three years over the post-war period to the 1980s.
The prospect of home-ownership is therefore grim for low-income earners in suburbs south of Brisbane, including Kingston and Woodridge, where workers were taking home average annual wages of $31,521 and $31,552 respectively mid-way through 2007.
According to the Australian Bureau of Statistics the average household income in Brisbane in the same year was $41,720.
''The pressures on affordability are a function of strong demand and limited supply driven by strong population growth underpinned by a range of factors: higher immigration rates; a decline in standard home loan interest rates from the mid-1990s; and greater availability of credit,'' the State of Australian Cities report said.
But Queensland Council of Social Service president Karyn Walsh said the rental trap was of most concern, with a 17 per cent rise in weekly rental costs nationwide since 2000.
She said Brisbane suburbs with traditionally low rental prices had suddenly surged forcing families to move further away from the city and vital health and education services and abandon their plans for home-ownership.
''The worst case scenario is that they end up homeless and are sleeping in cars or with friends and relatives until they can find other accommodation,'' Ms Walsh said.
She said it was not uncommon for two families to share a house in order to afford the weekly rent and utility bills.
''We've seen up to 10 children living under one roof in suburbs including Holland Park, Mt Gravatt and Stafford.''
She said the impact of housing affordability on children was often overlooked.
''Children are affected by housing instability greatly. There is the constant trauma of moving, packing up their belongings, and losing things that are dear to them.
''Worse, it greatly disrupts their school life.'' Ms Walsh said worsening housing affordability was the consequence of prosperity.
''Unless governments pay attention - because the market doesn't - to people who are the most disadvantaged then we will see poverty rates get higher.''
We all did well... heehee...
