By JOHN VAN KLAVEREN
PROPERTY industry sectors are “spruiking” Geelong’s affordability crisis for their own benefit, according to a real estate expert.
Domain Group senior economist Dr Andrew Wilson said developers and builders used the “affordability mantra” to push for increased home building.
“There are people in the community who are marginalised by a lack of home ownership but there are parts of the industry that use affordability to say we need more houses,” Dr Wilson said.
“Affordability is about your mortgage payment more than about land supply, and low interest rates have given a sharp spike to affordability.
“The improvement in affordability has washed through the system now and there’s a role for government to improve that.”
The Independent reported last week that Master Builders Association of Victoria research showed local housing had declined from “unaffordable” in 2004 to “highly unaffordable”.
The Barwon region has the fifth most expensive land in Australia, according to Housing Industry Association (HIA) and RP Data.
The ranking followed revelations in the Independent that an international survey rated Geelong property less affordable than New York.
But Dr Wilson said Geelong was affordable compared to Melbourne and was marketed on its lifestyle benefits.
“Geelong is more closely associated with Melbourne these days, especially given the number of commuters.
“The outlook is positive for the market in terms of demand levels because prices are lucky to keep up with inflation.
“We know the issues Geelong has with the downside to manufacturing and its impact on job numbers and confidence.
“The unemployment rate has fallen recently but job growth has also fallen and Geelong could be suffering a participation issue as the workforce has shrunken.
“The positives in terms of the housing market lie in generating new dwellings and creating jobs. I’m not convinced we’ve seen enough houses built given the low interest rates and I don’t think interest rates will go up any time soon.”
