Investor or first home buyer, the housing crisis does offer opportunities
The housing crisis presents opportunities for investors, as well as first-time buyers through government schemes that assist in purchasing homes with smaller deposits.
Australia’s housing market is facing rising unaffordability and a growing need for accessible and affordable housing solutions.
There is work being done to address these challenges, and there are opportunities that present themselves for real estate investors and home buyers.
Australia has some of the least affordable housing in the world, with Sydney and Melbourne among the top 10 most expensive cities globally for housing.
The high cost of housing, coupled with rising interest rates and inflation, has exacerbated the affordability crisis. This has led to a situation where a median-income household in Australia can now afford only 13 per cent of homes sold across the country, the lowest share since records began in 1995.
There are some compelling and disturbing figures that epitomise the current state of housing affordability.
More than 1.8 million new households are expected to form in Australia from 2023 to 2033, with a projected supply shortage of around 106,300 dwellings over the next five years.
The supply of new dwellings is expected to fall to 127,500 in 2024-25, with a recovery anticipated after 2025-26.
An estimated 377,600 households are in housing need, comprising those in rental stress and experiencing homelessness.
Government housing initiatives and policy responses
Housing is consistently rated as one of the top few priorities whenever voters are polled about election issues and the Federal Government is all too aware of the fact that 30 per cent of Australians are in a rental property and a similar proportion of home owners are in mortgage stress.
In response, the Government has launched a string of initiatives and schemes.
The Housing Australia Future Fund, investing $10 billion to build 30,000 new social and affordable rental homes in its first five years.
The National Housing and Homelessness Plan aims to address housing challenges through reforms and collaboration with stakeholders.
The National Housing Accord sets a target of one million new homes over five years from mid-2024, including 10,000 new affordable homes supported by the Commonwealth.
Opportunities for buyers and investors
The focus on affordable housing presents opportunities for first-time buyers, particularly through government schemes that assist in purchasing homes with smaller deposits.
Investors have the chance to contribute to socially responsible projects, with government incentives for building and investing in affordable housing.
The expansion of the Home Guarantee Scheme and efforts to increase housing supply are expected to create more accessible pathways to homeownership.
The current housing affordability crisis is not just a statistic; it’s a reality that affects millions of Australians every day.
However, amidst these challenges lie significant opportunities for innovative solutions and investments.
Affordable housing needs to be approached as not only a social responsibility but also as a viable investment avenue that can yield sustainable returns.
By leveraging government initiatives and understanding market trends, investors can play a pivotal role in alleviating this crisis while benefiting from the potential growth in this sector.
The key is to adopt a socially conscious investment strategy that aligns with the changing dynamics of the property market.
Affordable housing should be seen as an essential part of any diversified property portfolio, offering a unique blend of social impact and financial viability.”