Abstract:

Despite mortgage interest rates averaging historically low levels, housing affordability for a significant group of working australians is steadily worsening. A benchmark of 'housing stress' consists of households that pay more than 30% of the gross income on housing costs, whether renting or buying. Since 1986 the number of low-income (the lower 40% of the income bracket) households in dwelling stress in Australia has grown from 90,000 to over 250,000. This number includes capital cities only; the numbers are higher when regional areas are included. On current trends, the number of stresses households in Australia will reach 1 million by 2020. The study whittled down 120 possible policy options to 3 preferred options which include: a direct government subsidy for private (debt) investment in affordable housing; the establishment of a stock exchange listed company as a vehicle for private sector investment in affordable housing; a prescribed ratio for affordable investment assets. Option 1 is the option preferred by the study authors.