Why Australia’s Housing Crisis Is a Warning for the World

[Music] apparently a hundred years ago there were witches that actually lived here but that hasn't stopped it from being one of the most popular houses on the market this year there's a huge hole as you walk in the front of the house we put a bit of ply board there but we're still recommending that people step over that if they can some of these houses they're in such bad condition that we have to actually get people to sign waivers just so they understand what they're walking into we've had over a thousand inquiries online we've shown about 60 people through the home sent out 30 contracts with the market feedback have been anywhere 1.3 and 1.4 million so it just makes it a really great raw site for someone looking to renovate Kevin do you want to know out here as well yep [Music] well ladies and gentlemen we're here to sell so we open the bidding ladies and gentlemen at one million one hundred thousand I thank you for that sir one five at one million six I have oh sailing of one million 918 so congratulations ladies and gentlemen have a greater tonight alarms are going off in Sydney known as Australia's Bellwether property Market the coastal city ranks as the second least affordable housing market in the world among 94 major cities this Rush is very overwhelming it's not enough Supply and there's too much demand I've been selling in the area for the last 18 years the Sydney Market is the strongest in Australia and that has to do with the beaches the accessibility to the City airports it's a fantastic location with a huge lifestyle scene and I think it's the highest growing population out of all the Australian cities and that's always going to cause prices to go up when land and and homes are scarce the toughest Market I'm finding for buyers are the low-income first home buyers and they're often looking at one bedroom or two-bedroom apartments because you can imagine when rates go up from two percent to six percent that's huge for someone who's on a single income salary you know looking to buy their first home the predicament is neared globally from the UK to Singapore with little to no signs of relief so what's driving this housing Crunch and what are the consequences for buyers sellers construction firms and the government National home prices in Australia have risen 33 since the onset of the pandemic at the same time interest rates are markedly higher now the reason why we're seeing that is the fact that we've got very tight conditions with respect to the supply of stock on market we've also got the unemployment rate which is sitting around a multi-decade low adding an additional sense of security for home buyers so we're continuing to see that housing demand has been bolstered by a very strong Rebound in net migration the population of Greater Sydney is expected to grow by 1 million by 2041 to 6.1 million people to cope with that influx the state needs about 900 000 additional dwellings by then according to government estimates but the tight supply of homes for sale isn't the only problem [Music] rental markets in Australia are incredibly challenged at the moment so we've got vacancy rates which are at or close to record lows in most Capital Cities australia-wide we've got very strong demand to rent and that continues to outstrip the supply of available rentals less than one percent of the country's rental properties are available for occupancy which is the lowest among comparable markets globally and the tight Supply partly explains why rents for houses and apartments surged by 16 and 20 respectively in the past year alone when we look at the affordability challenges that the housing market presents in Australia we're seeing that it is the younger generation of Australians that are most impacted by these challenges and also amongst those on lower income 23 year old Harry and his mother live on the outskirts of Sydney Harry is a student and has a part-time job with a two-hour commute each way they're bearing the brunt of the housing crisis having been left with no choice but to move from house to house to house the house we were put in previously I think we started renting it for 470 or 500 a week it Rose to 550 we just couldn't keep up with the cost my mum is a Catholic Primary School teacher she's lived in the area for 20 something plus years and she can't afford to live in the same area that she's lived in Harry says they were evicted from their rental house in 2022 when they asked for repairs to the shower and then suddenly we've just had to drop everything and spend all of our time looking for rental properties just inspection after inspection and afternoon spent going to inspections and applying for properties and not hearing anything back one of the inspections that we went to in a suburb nearby we got there and there were around about 85 people I think we counted you don't really stand a chance when there's that many people who are going it's the same with the pitch and it's kind of like wow you know let me do a resume for my dog [Music] hurdles remain for building more homes to ease the supply crunch in the background are the construction collapses with firms going bankrupt by the dozens a pandemic driven building boom is partly to blame construction firms had agreed to fix price contracts with lockdown homeowners looking to fix up their properties but then the cost of Labor and building materials spiked along with inflation according to the builders Collective of Australia houses are now 30 percent more expensive to build than before the pandemic for some any kind of relief can't come soon enough one way to help alleviate current challenges in the Australian housing market is also by incentivizing or increasing the supply of Social and affordable housing for a portion of housing market participants that are so often overlooked and for whom it is crucial to be able to access stable and secure housing tenure across Australia housing Supply and housing affordability is a challenge we are looking at opportunities to Greater provide densification we're looking at providing more planning Pathways for different types of housing typologies firstly increasing the social housing stock where you live it's not just a roof over your head either it's your community it's where you build your family it's where you build your networks it's how you get to know people it's your sense of self we've recently received 610 million dollars from the Commonwealth government that will be directly put into social housing and the government has a contribution they make to social housing uh in in the millions of hundreds of millions each year to make sure that we reinvest in both new and improved social housing stock at the moment every single aspect of renting in this country is centered around profit the home is such an Indescribable you know thing but and realistically you might not even get the privilege to own your own home at all [Music] boom boom boom

Channel: Bloomberg Originals

Views: 1,416,661

Keywords: News, bloomberg, quicktake, business, bloomberg quicktake, quicktake originals, bloomberg quicktake by bloomberg, documentary, mini documentary, mini doc, doc, us news, world news, finance, science

Id: IqKIlLS7ln4

Length: 7min 49sec (469 seconds)

Published: Wed Sep 20 2023