Mortgage Choice CEO John Flavell calls for the Government to take the growing problem of housing affordability seriously
Mortgage Choice CEO John Flavell tells MPA the Government needs to take the growing problem of housing affordability seriously.
One of the biggest problems affecting thousands of Australians is housing affordability. Unfortunately, very little is being done to alleviate this problem.
Data from the Australian Bureau of Statistics shows the average home loan has grown three times faster than the average Australian full-time wage in the past two years.
According to the data, the average home loan grew by 13.8% in the two years to February 2016 – from $314,000 to $357,200. Meanwhile, the average Australian full-time wage grew just 4.0% from $77,838 to $80,958.
As a result, the size of the average home loan in Australia is now 4.4 times larger than the average wage. In 2013, the average loan size was 3.9 times the average full-time Australian wage.
These statistics make one thing very clear: wage growth is not keeping pace with property price growth.
If this trend continues, how can we expect our children or grandchildren to find and purchase affordable accommodation?
Perhaps it is time for me to sit down with my three daughters and have the tough conversation about property ownership.
I will have to say: “I am sorry girls, but in the absence of sufficient leadership in this country, I have some bad news. As you know, I have some concerns in relation to your ability to afford to buy your own home in the future, and it seems those concerns are well founded. In the interests of political survival, it seems no one is prepared to make the changes to our tax system that are required for our collective future prosperity. As a result, you may not be able to afford to rent a house, let alone buy one. It looks like you will all be living with me for some time to come.”
Clearly, this is not a conversation I want to have, nor is it something they would like to hear. But if both I and my fellow Australians want to avoid having this conversation, something needs to change.
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We need both sides of government to stop trying to solve the problem of housing affordability through meaningless inquiries into home ownership and start taking action.
At Mortgage Choice, we believe the government should take a holistic view of the issues and create a program of reform.
That reform could come from the introduction of new policies or systematic changes to our taxation system.
The reality is our current tax system does very little to stimulate or drive economic growth. It does nothing to attract, retain and encourage global and local businesses to invest on our shores, and, it continues to provide very little incentive for those in the workforce to grow and develop their skills. The time for political grandstanding has come to an end and it is now time to act.
While we understand there is no ‘quick fix’ when it comes to the issue of housing affordability, nothing will be improved until the right action is taken.
One of the biggest problems affecting thousands of Australians is housing affordability. Unfortunately, very little is being done to alleviate this problem.
Data from the Australian Bureau of Statistics shows the average home loan has grown three times faster than the average Australian full-time wage in the past two years.
According to the data, the average home loan grew by 13.8% in the two years to February 2016 – from $314,000 to $357,200. Meanwhile, the average Australian full-time wage grew just 4.0% from $77,838 to $80,958.
As a result, the size of the average home loan in Australia is now 4.4 times larger than the average wage. In 2013, the average loan size was 3.9 times the average full-time Australian wage.
These statistics make one thing very clear: wage growth is not keeping pace with property price growth.
If this trend continues, how can we expect our children or grandchildren to find and purchase affordable accommodation?
Perhaps it is time for me to sit down with my three daughters and have the tough conversation about property ownership.
I will have to say: “I am sorry girls, but in the absence of sufficient leadership in this country, I have some bad news. As you know, I have some concerns in relation to your ability to afford to buy your own home in the future, and it seems those concerns are well founded. In the interests of political survival, it seems no one is prepared to make the changes to our tax system that are required for our collective future prosperity. As a result, you may not be able to afford to rent a house, let alone buy one. It looks like you will all be living with me for some time to come.”
Clearly, this is not a conversation I want to have, nor is it something they would like to hear. But if both I and my fellow Australians want to avoid having this conversation, something needs to change.
We need both sides of government to stop trying to solve the problem of housing affordability through meaningless inquiries into home ownership and start taking action.
At Mortgage Choice, we believe the government should take a holistic view of the issues and create a program of reform.
That reform could come from the introduction of new policies or systematic changes to our taxation system.
The reality is our current tax system does very little to stimulate or drive economic growth. It does nothing to attract, retain and encourage global and local businesses to invest on our shores, and, it continues to provide very little incentive for those in the workforce to grow and develop their skills. The time for political grandstanding has come to an end and it is now time to act.
While we understand there is no ‘quick fix’ when it comes to the issue of housing affordability, nothing will be improved until the right action is taken.
