7th September, 2017.
“The Australian dream” refers to the tradition belief of Australian, that home-ownership is the way to access a better and more enjoyable life. Sadly, with the elevating increase in today’s housing market comparing to the Aussie’s income, the dream doesn’t seem to be achievable anymore.
Housing crisis has always been worrying the new generation of Australian, the five major cities of Australia were all ranked in the top 20 most expensive city in the world. According to the Demographia International Housing Affordability Survey 2017, median price of residential estates in Sydney is equivalent to 12 years’ salary of the Aussies. Ever since 2011, home ownership here has been declining every year, 200,000 Australian became homeless in 5 years’ time.
Foreign investors are often blamed for the constant increase in Australian’s housing prices. Report of Foreign Investment Review Board 2016 has recorded a 60 and 75 percent increase in foreign investment on real estate (worth about $61 billion) in the last two financial years. Yet, is it the case in Brisbane?
“The property prices I think of apartments, probably over the last 18 months, apartment prices in Chermside and some of the other suburbs has decreased.” Said Rod Hodgson, Position Property agent.
In fact, the latest HIA-CoreLogic Residential Land Report on August 2017 revealed the median lot price in the residential land market has come off record highs to sit at $245,000 which is 3.6 percent lower than it was in the first quarter of 2016.
Rod then explained that the supply of apartments has been quite high in those inner city suburbs. “There are a lot of supply, the demand in the market has been satisfied and there is still supply available.
Besides, the HIA-CoreLogic residential land report 2017 found median lot price on the Sunshine Coast is $278,750, while the Gold Coast is lagging behind at $243,400
based on sales during the March quarter.
Housing Industry Association principal economist Tim Reardon does comment on The Courier mail in August that Queensland is the only jurisdiction where there is a region with a land price higher than the capital city.
As a real estate agent in Chermside with a majority of local clients, Rob describe people today are purchasing real estates as a life style over than just a place to live. “They could be first time buyers or retired people, obviously because this area attracts elderlies as there are two hospitals and a shopping centre down the road.”
So is the Australian Dream over?
“Bloody hell… Um… That’s getting more and more difficult.”
“I don’t think its over, the great Australian dream is difficult, still achievable but maybe to to the same extend.”
“Younger people tend to consider their life style when they purchase, they want to be in a convenient location. I have sold to some first home buyers, some young couples had purchased here (Chermside) and is simply because of lifestyle.”
“They understand the market sales, hey don’t want a big block of land and field, instead they would rather live in an apartment with a nice balcony.”
Rod believes that the Great Australian Dream has been redefined through out the years by comparing the housing affordability of today’s Brisbane and his father’s generation. “I was born in 1971, our family’s first home was a three-bedroom brick house, on a block of land at Palm beach, Gold Coast. He purchased that for $10,000 dollars in the same year I was born.”
In fact, housing affordability crisis is
“At that time, it is equivalent to three year’s salary, and this is the problem with affordability, as wages never increase as quick as the housing market does. People in larger cities like Sydney, Melbourne, Hong Kong has higher salary in average to off set the cost of rent and liveability, but even in Brisbane the median of housing prices is somewhere around $500,000, which is like seven years’ salary.”
“Comparing that 40 years ago, is easy for the baby boomers to say “is not that hard”, but the extra 4 years’ salary is just different, plus you got interest on top of that, this is quite a big financial burden for people trying to get into the market especially for young family.”
How about overseas investment in Brisbane?
JQ1 Property manager Mei Wang, who’s clients are mostly Chinese investors believes that overseas investment doesn’t contradict with The Australian Dream of the young locals.
“Despite certain restriction on deposit and stamp duties, overseas investors are also restricted to buy flats that were still building or have only been built for one year.” Said Mei Wang, JQ1 Property manager in Kelvin Grove.
“Overseas investors tend to purchase apartments around city or universities campus, as it is more attractive for talents like international students to rent, and does has a larger potential.”
“Other than fresh new apartments, there are still a lot of choices for in the housing market for the young Australian in Brisbane to consider.”
According to the latest announcement from the Chinese Government, domestic companies in China will now be restricted from making overseas investments in sectors such as real estate, hotels, entertainment, and sports clubs, while report “Demystifying Chinese investment in Australia”, which was done by The University of Sydney, does found that Chinese investment growth has slowed down by six percent in 2016.
“This might stable the Brisbane housing market.” She said.
In fact, excess overseas investment do not only lead to an increase in housing prices, but cultural conflict and environmental damage as well.
In five years time since the Korean government establish the investment immigration for the Korean treasure island, Jeju Island, the amount of land bought by Chinese nationals has soared by nearly 300 times. While, the building of tourism and recreation facilities all over the island by Chinese real estate developers continues to raise concerns about eyesores and environmental damage of the locals. Which at last, the Korean Government had limited the ratio of land ownership of the island between the locals and the foreign investors to fifty-fifty.
Graham Wolfe, Executive Director Planning & Development of Housing Institute Australia believes that certain ratio restriction of land or house ownership could be adjusted and apply on to Brisbane to ensure the locals ownership in Brisbane, yet it was too “ideal” to apply in today’s Brisbane.