Easier to buy ‘in New York’

Kim Waters
HOMES in London and New York are more affordable than in Geelong, according to a new international housing affordability survey.
The Demographia International survey ranked Geelong among the 15 least affordable of 325 population centres around the world.
Geelong earned its ranking for a median house price of $382,000 compared to an average annual income of $51,000.
Hong Kong ranked least affordable with a median price of $2.6 million and average income at $225,400.
The USA’s Saginaw was most affordable with a median property price of $61,400 and incomes averaging $39,500.
Seven Australian centres including Sydney, Melbourne, Wollongong and the Gold Coast ranked in the 15 least affordable.
“The concentration of severe un-affordability was particularly stark in Australia, where approximately 85 per cent of the metropolitan markets were severely unaffordable,” the survey said.
“Housing remains the most unaffordable in Australia except for the single market in Hong Kong included in this survey.
“Australia is characterised by more-restrictive land-use policies.”
Housing Industry Association economist Matthew King blamed Geelong’s affordability ranking on “supply obstacles”.
Land and housing supply in the city had failed to keep pace with fast population growth, he said.
“Unfortunately, what we’ve seen is this supply of land coming to market not quite keeping pace with the underlying requirement for housing. We’ve also seen an escalation of infrastructure charges and inadequate infrastructure taxation.”
Mr King said “streamlining planning schemes” would prevent state and local government “blockages” in land release.
“We need to ensure a steady supply of land coming to the market.
“We aren’t going to be able to build the houses necessary if there aren’t large quantities of land zoned for residential development.
“Infrastructure taxation should also be kept in check because stamp duty can currently be levied three times on a house-and-land-package construction process.”
Mr King predicted that declining residential construction activity this year would put further pressure on housing affordability in Geelong.
“We need to ensure in the short-term that we exercise a large degree of caution with interest rate increases and I’d recommend the reserve bank exercise significant caution in its monetary policy this year.
“Australia has had a long-standing affordability problem and how we compare with other countries doesn’t measure too well.”