With housing affordability a key issue in Australia, the country’s largest cities are struggling to find ways to meet demand.
In a new report released by the Australian Institute of Housing Studies (AISH), Adelaide and Melbourne have the highest house prices in the country, followed by Perth and Adelaide.
It’s a big challenge, said David Smith, director of research at AISH, because most Australians aren’t getting the housing they need for their families.
“If you don’t have affordable housing, you are going to see people who are in poverty, who are working long hours, and then you have families who are on the street, who have to cope with the housing crisis,” he said.
“What we’re seeing in Adelaide is that that affordability gap has widened, and that’s creating more problems for people who have a mortgage.”
The AISH report says Perth is the biggest metro area in Australia to have a shortage of affordable housing.
“There’s a huge amount of demand for housing,” said Smith.
“People need to be able to afford to live in the Perth metropolitan area, they need to have the resources they need, and they need the ability to get a good job, and the ability in the future to be in a good, secure place.”
Smith said Perth is now the only metropolitan area in the world where the median home price is below $400,000, and a median salary is $130,000.
The AISH report also found that about 25 per cent of Perth’s households earn less than $20,000 a year, and 40 per cent earn less $20.
In Melbourne, where the number of people earning less than half of the median income is less than 30 per cent, a median house price of $400 000 is about 10 per cent below the average for Perth.
In Adelaide, where a median income of $40,000 is about half the median salary in Perth, a home with a median price of less than the median house is now available for sale for about $200 000.
“The challenge in Australia is that if we don’t get housing to people, it means they don’t stay in Australia,” said Mark Smith, an associate professor of sociology at Adelaide’s Murdoch University.
“And so that’s why the AISH study is so important.”
Smith says that while it’s not just about affordability, it’s also about social issues like unemployment and homelessness.
“I think it’s a very powerful argument that housing is a social issue, it isn’t just a financial issue,” he told AM.
“That’s the challenge in the Australian city, and in Melbourne, it is a much more social issue.
You have a lot of people who need a home, and you’re not able to get it.
That’s a really powerful argument for the AISI report.”
The report notes that although there is no shortage of housing in Perth and Melbourne, the situation is very different in the smaller cities like Newcastle, Perth and Darwin.
“It’s really important to recognise that if you’re a city in Australia and you have a big problem, it will take years to get to the next level of housing supply and then it will probably take decades to get back to the level that we had,” Smith said.