Queensland Parliamentary Library Housing Affordability High levels of home ownership, and the aspirations of young people and families towards home ownership, have long been considered one of the hallmarks of Australian culture. However, many people have recently asked whether there is now a crisis in housing affordability, not only for homebuyers but also for those in the private rental market. Others dispute the existence of such a crisis. This Research Brief: • examines the concept of ‘housing stress’ and provides information on the numbers of households in that circumstance; • discusses a selection of recent reports/other information relevant to the issue of housing affordability; • profiles the private rental market in Queensland and considers a recent report on rent bidding practices; and • identifies some of the possible causes of, and solutions to, the apparent housing affordability concerns. This includes a discussion of the recently announced Queensland Government ‘Housing Affordability Strategy’. Renee Gastaldon Research Brief No 2007/27 Queensland Parliamentary Library General Distribution Research Team Research and Information Service Ms Karen Sampford, Team Leader (07) 3406 7116 Mrs Nicolee Dixon, Senior Parliamentary Research Officer (07) 3406 7409 Mrs Renee Gastaldon, Parliamentary Research Officer (07) 3406 7241 Research Publications are compiled for Members of the Queensland Parliament, for use in parliamentary debates and for related parliamentary purposes. Information in publications is current to the date of publication. Information on legislation, case law or legal policy issues does not constitute legal advice. Research Publications on Bills reflect the legislation as introduced and should not be considered complete guides to the legislation. 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(Tel: 07 3406 7116) Email: [email protected] Information about Research Publications can be found on the Internet at: www.parliament.qld.gov.au/publications CONTENTS EXECUTIVE SUMMARY ....................................................................................... 1 INTRODUCTION.............................................................................................1 2 HOUSING STRESS ..........................................................................................5 3 SELECTED REPORTS RELEVANT TO HOUSING AFFORDABILITY............................................................................................8 3.1 HIA/COMMONWEALTH BANK AFFORDABILITY REPORT ....................................9 3.2 DEMOGRAPHIA INTERNATIONAL HOUSING AFFORDABILITY SURVEY: 2007 .....10 3.3 URBAN DEVELOPMENT INSTITUTE OF AUSTRALIA, AN INDUSTRY REPORT INTO AFFORDABLE HOME OWNERSHIP IN AUSTRALIA.......................11 3.4 RESIDENTIAL TENANCY AUTHORITY, MEDIAN WEEKLY RENTS .................14 3.5 OFFICE OF ECONOMIC AND STATISTICAL RESEARCH, DATA ON VACANCY RATES ........................................................................................16 3.6 2006 CENSUS...............................................................................................17 3.7 PROPERTY COUNCIL OF AUSTRALIA: BEYOND REACH: A WORKFORCE HOUSING CRISIS IN THE MAKING ..................................................................18 3.8 ST VINCENT DE PAUL SOCIETY, DON’T DREAM IT’S OVER ...........................21 4 PRIVATE RENTAL MARKET ....................................................................22 4.1 PROFILE OF THE PRIVATE RENTAL MARKET IN QUEENSLAND.....................23 4.2 ‘RENT BIDDING’ PRACTICES........................................................................24 4.2.1 ‘Rent bidding’ practices and their prevalence .....................................25 4.2.2 Likely future trends in rent bidding .....................................................25 4.2.3 Some rent bidding practices constitute misleading or deceptive conduct ................................................................................25 4.2.4 Suggested response to rent bidding practices ......................................26 4.2.5 Real Estate Institute of Queensland information on advertising rental properties.................................................................27 4.3 COMMONWEALTH RENT ASSISTANCE SCHEME ...........................................27 5 CAUSES OF, AND SOLUTIONS TO, THE HOUSING AFFORDABILITY SITUATION ................................................................29 5.1 FACTORS CONTRIBUTING TO HOUSING AFFORDABILITY .............................29 5.2 POSSIBLE SOLUTIONS TO IMPROVING HOUSING AFFORDABILITY................42 5.2.1 Queensland Government’s Housing Affordability Strategy ...............43 5.2.2 Federal Labor’s ‘New Directions for Affordable Housing’ ................48 5.2.3 Statements made by the Federal Government .....................................51 APPENDIX A – JOINT MINISTERIAL MEDIA STATEMENT ...................53 APPENDIX B – JOINT MINISTERIAL MEDIA STATEMENT....................55 APPENDIX C – MINISTERIAL MEDIA STATEMENT.................................57 APPENDIX D – JOINT MINISTERIAL MEDIA STATEMENT ...................59 APPENDIX E – JOINT MINISTERIAL MEDIA STATEMENT....................60 APPENDIX F – JOINT MINISTERIAL MEDIA STATEMENT....................61 RECENT QPL RESEARCH PUBLICATIONS 2007........................................63 Housing Affordability EXECUTIVE SUMMARY High levels of home ownership, and the aspirations of young people and families towards home ownership, have long been considered one of the hallmarks of Australian culture. However, recent reports of a ‘crisis’ in the affordability of housing in Australia have caused many people to question just how attainable ‘the great Australian dream’ is, how attainable it will be for future generations, and what this means for the Australian culture. The concern lies with not only homebuyers but also, increasingly, those in the private rental market. Some commentators have, however, disputed the existence of such a crisis (pages 1-5). This Research Brief: ▪ examines the concept of ‘housing stress’ and provides information on the number of households, both homebuyers and renters, in that circumstance (pages 5-8); ▪ discusses a selection of recent reports/other information relevant to the issue of housing affordability, including: - the HIA/Commonwealth Bank Affordability Report (page 9); - the Demographia International Housing Affordability Survey: 2007 (pages 10-11); - a report of the Urban Development Institute of Australia, An Industry Report into Affordable Home Ownership in Australia (pages 11-14); - statistics on median weekly rents in Queensland collated by the Residential Tenancies Authority (pages 14-16); - information on private rental market vacancy rates in Queensland collated by the Office of Economic and Statistical Research (pages 16-17); - the 2006 Census (page 17); - a report of the Property Council of Australia, Beyond Reach: A Workforce Housing Crisis in the Making (pages 18-20); and - a report of the St Vincent de Paul Society, Don’t Dream it’s Over (pages 21-22); ▪ profiles the private rental market in Queensland and considers a recent report on rent bidding practices (pages 22-28); and ▪ identifies some of the possible causes of (pages 29-42), and solutions to (pages 42-51), the apparent housing affordability concerns. This includes a consideration of the Queensland Government’s ‘Housing Affordability Strategy’ (pages 43-48), the widely reported Federal Labor policy ‘New Directions for Affordable Housing’ (pages 48-51) and statements made by the federal government on the issue of housing affordability (page 51). Information in this Research Brief is current to 30 September 2007. Housing Affordability Page 1 1 INTRODUCTION High levels of home ownership, and the aspirations of young people and families towards home ownership, have long been considered one of the hallmarks of Australian culture. The goal of owning one’s own home is a widely held aspiration in our society. To some it signifies security, to others perhaps an economic legacy, and to others the cornerstone of societal stability, morale or even national pride. The realistic possibility of home ownership is often conceptually linked to a level of satisfaction with lifestyle and financial security and the hope of young generations that they can have a secure and prosperous future and live their personal version of the great Australian dream.1 As one commentator