Page 221 - Week 02 - Tuesday, 6 March 2007
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housing stock better matches the needs of our clients. It is for this reason that we embarked upon large-scale planning reforms. It is for this reason that we announced last year that we were releasing more land, including an additional 500-block en globo release at west Macgregor.
Importantly, my government recognises the need to embrace and support those in need and those who are genuinely struggling to achieve the great Australian dream, and that is why I appointed and established the affordable housing steering group. Let me be clear that this group is no theoretically-driven think tank. I have charged it with developing innovative and practical initiatives to increase the supply of affordable housing within Canberra. Those working on and contributing to the steering group, and all members of the Assembly, know full well that housing affordability is a major and complex issue.
The ACT is not alone in facing problems. They are being experienced across Australia and internationally. In fact, the third annual demographia international housing affordability survey 2007 states that the least affordable markets are generally in California, Hawaii, the US east coast, Australia, United Kingdom, New Zealand and Vancouver. Of the markets within Australia, Sydney, not surprisingly, rated the worst, followed by Perth, Hobart and Melbourne. In fact, all four had the unfortunate distinction of rating in the top 25 most unaffordable housing markets of all markets measured.
The ACT, in fact, in that major international study of affordability, was the most affordable of all Australian markets, achieving a median multiple—the median house price to median household income multiple—of 4.9. While this is still classified in the survey as unaffordable, it stands in stark contrast to the rating of 8.5 for Sydney and 8.0 for Perth, both of which were classified as severely unaffordable.
We also need to acknowledge that there are many factors that contribute to the housing affordability equation. Land supply is one factor, but construction costs have increased considerably over the past five years, whilst chronic skill shortages, increases in material prices and escalating cost of fuel have all contributed to higher housing costs. These issues are all outside the control of state and territory governments.
There is another aspect of the equation that is beyond the control of the ACT government, and that is the recent and significant expansion of the commonwealth public service, which we welcome but which has put extra pressure on housing availability while, if anything, worsening the skill shortages confronting the private sector in the city and in the ACT public service. I welcome any signals of commonwealth commitment to Canberra as the national capital, but members must concede that an influx of the size announced by the commonwealth, unsignalled and not flagged in advance, creates potential difficulties for a housing market that is being asked to suddenly absorb a few thousand extra families.
The housing equation, as I said, is a very complex one. Wage policies determine employment, affordability and the cost of housing. Retirement income policies affect ownership as a preferred tenure. Education policies impact on the capacity to save, and broader macroeconomic policies influence interest rates which, in turn, impact on
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