Get used to your commute: data confirms houses near jobs are too expensive
Australia’s capital cities are getting more and more units, that are largely concentrated and come with a hefty price tag, a new report shows. And while these areas also have lots of jobs, the high price for houses means many on low incomes won’t be able to access that employment.
Between 2006 and 2014, more than 50% of new units were built in the 20% of local government areas with the highest number of jobs.
When compared internationally, it would seem that Australian housing supply has not been as weak as is widely believed. However, the report points to some stark differences in housing supply patterns, emerging across Australia’s capital cities.
In Sydney, Perth and Brisbane, new housing supply has lagged slightly behind population growth. In the other capital cities, housing supply actually outpaced population growth between 2006 and 2014.
Housing supply and house prices
The issue of housing affordability has traditionally been pitched in terms of supply failing to keep pace with growing demand, and house prices rising in response to the imbalance.
Yet, house price inflation has surged even in metropolitan areas where housing supply exceeds population growth. The evidence suggests a complex relationship between supply, population growth and price that is shaped by both supply and demand-side factors.
As prices and rents rise, housing costs continue to eat up larger shares of household incomes, particularly in moderate and low-income groups.
The study shows 80% of new unit approvals were located in the top 20% of local government areas with the highest unit prices. This is while 80% of new house approvals were in the top 40% of local government areas with the highest house prices.
There is very little new supply in areas where house prices are lower, where households on low to moderate incomes can afford to live.
Originally Published by The Conversation, continue reading here.