Youth aged 16 to 17 years old who live in shared homes in major Australian cities are grappling with a rental affordability crisis, even with income support.
Homelessness Australia’s analysis shows that a 16- to 17-year-old teenager sharing property in Sydney spends 94 percent of their income on rental, albeit lower than 99 percent in the previous year.
Meanwhile, Brisbane saw a sudden increase in the portion of youth income spent on rental from 76 percent last year to 83 percent this year.
“Our policy choices actively conspire to push young people towards homelessness. Right when they need stability to take their first steps in employment or further education they are pushed into poverty, resulting in social exclusion, mental illness, and lost lifetime productivity,” Homelessness Australia CEO Kate Colvin said.
Homelessness Australia calls for a Youth Allowance of $80 (US$51) a day and for a 60 percent increase to Commonwealth Rent Assistance to assist with their rental costs.
NSW, Brisbane Apartment Constructions Decline
Housing Industry Association Chief Economist Tim Reardon said that the number of apartment units starting construction has fallen by 50 percent since the introduction of additional taxes in 2017.
Mr. Reardon noted that New South Wales (NSW) saw only 23,653 multi-units begin construction in 2023 and 21,652 units in 2022, the two weakest years of apartment commencements since 2012.
“The result was an exodus of foreign investors and a dramatic decline in higher density home building. A similar outcome can be observed across the country, especially in the capital cities, where similar taxes have been imposed,” Mr. Reardon said.
“Foreign investors are a crucial component to building new housing in Australia, especially the higher density living that is particularly important in periods of rapid migration.”
Similarly, the Property Council of Australia warned that this year, Brisbane has below 3,000 apartments under construction, a number expected to drop to less than 1,500 next year.
The council added that Brisbane’s apartment construction may even decline to zero after 2025.
“Getting the tax settings on the front-end right would alleviate some of the cost pressures and encourage further investment in Queensland’s future,” Property Council’s Queensland Executive Director Jess Caire said.
Constrained Property Listings Underpin Adelaide, Brisbane, Perth
Earlier, the Property Investment Professionals of Australia (PIPA) said in its National Market Update that constrained property listings underpin home values in Adelaide, Brisbane, and Perth in particular.In the report, Streamline Property Investors Managing Director Melinda Jennison said that property values in Brisbane have increased 53.5 percent since March 2020 up to the end of February this year, while Queensland’s regional markets saw a similar rise of 54.4 percent.
“This growth puts Queensland as the second-fastest growing property market over this timeframe, only slightly behind South Australia in terms of total growth and well above the growth for the combined capitals and combined regional markets nationally,” Streamline Property Buyers Managing Director Melinda Jennison said.
Ms. Jennison noted that Brisbane home values have increased 15.9 percent while unit values have risen 14.6 percent, superior to the capital city growth at a national level.
“Part of the reason for the continued upward price pressure throughout Queensland is due to low listing volumes throughout most regions, relative to the long-term average. Additionally, in Brisbane, compared to 12 months ago, total listings throughout February were down 15.7 percent,” according to SQM Research.
Meanwhile, The University of Adelaide master of property lecturer Peter Koulizos noted Adelaide’s “stellar” performance in the medium to long term, as home values rose 12.6 percent over the past 12 months.
“Adelaide’s property market will continue to grow from strength to strength, so much so that within two years, Adelaide’s median dwelling values will be higher than Melbourne’s median dwelling values,” the lecturer said.
As for Perth, Hotspotting Director Terry Ryder said that its market has passed its peak although the price data remains strong.
“It’s a classic scenario when a market reaches its peak, but it takes time before it’s reflected in the price statistics, which always lag,” Mr. Ryder said.
“It’s a major trap for investors who are still piling into that market and buying recklessly.”
PIPA Chair Nicola McDougall said that the federal government’s repeated statements committing to support the construction of 1.2 million homes over the next five years have no basis in reality.
PIPA also noted that net overseas migration totalled 550,000 in the year to Sept. 30, 2023, according to the Australian Bureau of Statistics (ABS), amid the country’s property crisis.
“Not only does that tap need to be turned off dramatically, but more needs to be done at a policy level to encourage investors back into the market to help remedy the rental catastrophe,” Ms. McDougall said.
