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Housing Challenges in Australia

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Housing Challenges in Australia
Presented by Prof Tony Dalton (RMIT University)
2018 ProSPER.Net Leadership Programme
12-16 November, 2018

Published in: Government & Nonprofit
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Housing Challenges in Australia

  1. 1. Housing challenges in Australia ProSPER.Net Leadership training program: Leadership for Urban Sustainable Development, 14 th November, 2018 Tony Dalton Centre for Urban Research RMIT University, Melbourne,
  2. 2. A glimpse of my early housing career
  3. 3. Introduction • Urban development and leadership • Introduction to the Australian housing system • Tenure pattern • Population and household growth • Settlement pattern • Three main challenges • Affordability: housing prices, rents and income • Supply: responding to sustained demand for more housing • Suburbanisation: housing provision in low density cities
  4. 4. Sustainable urban development and leadership • SDGs are objectives, especially SDG 11: Sustainable cities and communities, that should guide the production and reproduction of urban space • Leaders must develop an understanding of the institutional arrangements that are used to produce and reproduce urban space • Institutions are stable, valued, recurring patterns of behaviour embedded in the accepted practices of actors within groups and networks of groups • Sustainable urban development leadership is about changing institutions and their practices that produce and reproduce urban space
  5. 5. Introduction to the Australian housing system
  6. 6. Population and household growth • Australia is a ‘settler society’ living on lands never ceded by Indigenous people • Immigration and natural increase continues to drive population increase (Trading Economics 2017)
  7. 7. Australia housing tenure history • A home ownership society especially after WWII • Private renting a second class tenure • Public housing small and residual 0 1 2 3 4 5 6 7 8 0 10 20 30 40 50 60 70 80 1911 1918 1925 1932 1939 1946 1953 1960 1967 1974 1981 1988 1995 2002 DwellingNo(millions) Tenuremix(per-cent) Home owners Private tenants Public housing tenants Total occupied dwellings Not specified (Dalton, 2018)
  8. 8. Australia recent tenure trends • Declining homeownership rate • Owners without mortgage declining • Owners with mortgage increasing • Private renting increasing • Public/social housing declining (Trading Economics 2016)
  9. 9. Change in household type 1991-16 Melbourne • Decline in household size • Decline in share of households with children • Growth in share of households • Without children • One parent families • Lone person (.id 2018)
  10. 10. Australia settlement pattern • Large (capital) city – one per state and territory • Immigration and urban growth • Suburban and owner-occupied • Long run policy has supported suburban homeownership (World Population Review 2018)
  11. 11. Density within metropolitan capitals • Sydney the densest city • Canberra and Adelaide the least dense • Melbourne dense central area with suburbs beyond (Loader 2012)
  12. 12. The affordability challenge: housing prices, rents and income
  13. 13. Tenure and housing costs • Outright owners have very low housing costs • Public housing tenants housing costs moderated by rent policy • Low income purchasers and private tenants experience ‘housing stress’ All households: housing costs as a proportion of gross income for all tenure groups by income quintiles, 2011–12 (Dalton, T. 2014)
  14. 14. Sustained house price increases • Real increase in dwelling prices for all locations in Melbourne • Prices in inner/middle suburbs always greater than outer areas • Price difference between inner and outer areas has increased House price distance gradients, Melbourne1990–2010 (Dalton, T. 2014)
  15. 15. Prices for lower cost housing have increased most • Price of a dwelling in the lowest (1st and 2nd) deciles increased more than 100 % • Price of a dwelling in the 5th, 6th and 7th deciles increased by about 70%. Per-cent change in dwelling prices by price decile 2003-04 to 2015-16 (Daly, J., et al. 2017)
  16. 16. Owner occupier and rental housing finance • Owner occupiers and landlords borrow for purchase • Rising household indebtedness • Rising house prices (Reserve Bank of Australia 2018)
  17. 17. Public housing: ‘a dead and broken system’ Post WWII arrangements Objectives Supporting interests Overcome housing shortage All professions, unions, RSL etc Post war govt policy agencies Housing industry associations Affordable worker housing Industry departments and companies Local government Economic demand management Treasury Reserve Bank Slum reclamation Welfare and health professions Planning and architecture professions Construction innovation Engineering and architecture professions Unions Home ownership support Cooperative housing societies Tenants Current arrangements Objectives Supporting interests House low income and otherwise disadvantaged households Welfare and homeless persons service NGOs Housing researchers Tenant organisations Some local government authorities Community housing organisations Other divisions of human service departments Slide title refers to article Jacobs, K., et al. (2013)
  18. 18. Homelessness increasing • Nationally case load increase (AHIW) 22% and census increase (ABS) 14% • NSW increase is the standout jurisdiction Change in scale of homelessness by jurisdiction, 2011-16 (Pawson, H. et al. 2018)
  19. 19. Supplying new housing: responding to sustained demand
  20. 20. Melbourne urban consolidation policy • Growth forecast – 2016 4.7m increasing to 7.6/9.8 m by 2061 • Redirect growth: decline at the fringe and increase in existing city – 30/70 to 70/30 • Grow medium density and high rise housing
  21. 21. Growth in supply highly differentiated by price • Growth weakest in most affordable areas • Growth strongest in middle price segments • Most expensive housing growth in inner city units Growth in stock of houses and units between 2005/6 and 2013/14, by real price decile, per cent Ong, R., et al. 2017
  22. 22. New housing supply relates to the labour market • The supply of housing is closely related to the availability of jobs • House supply relatively even across deciles • Unit supply greatest in job rich areas Growth in stock of houses and units between 2005/6 and 2013/14, by job decile, per cent Ong, R., et al. 2017
  23. 23. Land and housing industry typology • Industry arrangements highly differentiated • Timing of supply responses to increased demand vary • No new supply for low income market segments Ong, R., et al. 2017
  24. 24. Continuing suburbanisation through low density development
  25. 25. Rural land to urban land Cranbourne in south east Melbourne, December 2012 and March 2017
  26. 26. Planning for suburban growth • Growth corridors with master planned estates • Lot size ↓ two storey houses ↑ • Density 15/17 dwgs/hec • Sustained demand for lots
  27. 27. Suburban fringe expansion issues • Increasing spatial inequality • Socioeconomic disadvantage • Biodiversity loss • Poor public health outcomes • Loss of food production land • Infrastructure allocative efficiency issues
  28. 28. Politics of suburban expansion • Formation of National Growth Areas Alliance - 20 outer local authorities • Outer suburban advocacy intensifies • Responses by state government • Symbolic politics 1: Inquire and consult • Symbolic politics 2: Suburbs portfolio • Tax: Growth Area Infrastructure Contribution • Planning: Precinct Structure Plans
  29. 29. Suburban production regime actors Actor group Industry assoc’s Policy positions Politics Landowners • Farmers • Amenity res • Speculators • Opposed to up-lift tax • Divided on UGB expansion • Individual submissions • Episodic mobilisations Exchange professionals • Real estate • Valuers REIA Neutral on UGB and tax Focus on regulation of agents Land developers UDIA Support continuous development with research and policy statements • Submissions • Policy statements • Media • Awards House builders HIA Support continuous development with research and policy statements • Submissions • Policy statements • Media • Awards • Producers speak through well resourced and organised industry associations • Strong positions on • expanding the urban growth boundary (UGB) • New urban infrastructure provision to support outward expansion
  30. 30. Conclusion: issues • Urban housing growth integral to economy based on continued immigration • Declining housing affordability and increases in marginal housing and homelessness • Increasing difference between the inner and outer house prices • Increasing spatial inequality – income and jobs –with ‘affordable’ housing on the fringe
  31. 31. Conclusion: policy settings State government level • Urban consolidation through redevelopment • New suburb issues recognised with limited additional infrastructure support • Support suburban expansion through the planning system • Maintain the status quo in the public housing system Federal government level • Primary responsibility for tax policy but little focus on housing and tax • Income support, including demand side rent assistance, but housing outcomes not examined • Reduced support to the states to maintain public housing provision • Limited support through states for support for homeless
  32. 32. References Loader, C. (2012). "Comparing the residential densities of Australian cities (2011)." Charting Transport: looking at transport through graphs and maps. Retrieved 11th November, 2018, from https://chartingtransport.com/2012/10/19/comparing-the-residential-densities-of-australian-cities-2011/. Trading Economics (2016). "Australian Home Ownership Rate." Retrieved 11th November, 2018, from https://tradingeconomics.com/australia/home- ownership-rate. Trading Economics (2017). "Australia population." Retrieved 11th November, 2018, from https://tradingeconomics.com/australia/home-ownership-rate. Dalton, T. (2018). Another suburban transition? Responding to climate change. Urban sustainabilty transitions: Australian cases - international perspective. T. Moore, R. Horne, F. de Haan and B. Gleeson. Singapore, Springer. .id (2018). Change in household type 1991 to 2011,".id the population experts." Retrieved 11th November, 2018, from https://home.id.com.au/. World Population Review (2018). "Australia Population, (2018-09-18)." Retrieved 16th November 2018, from http://worldpopulationreview.com/countries/australia/. Dalton, T. (2014). Housing Policy: Changes and Prospects. Social policy in Australia : understanding for action 3rd edition. A. McClelland and P. Smyth. Melbourne, Oxford University Press. 3rd edition. Daly, J., et al. (2017). Three charts on: poorer Australians bearing the brunt of rising housing costs. The Conversation. Melbourne, The Conversation. Reserve Bank of Australia (2018). "Housing prices and household debt." Chart pack: household sector. Retrieved 12 November, 2018, from https://www.rba.gov.au/chart-pack/. Jacobs, K., Berry, M, Dalton, T. (2013). "‘A dead and broken system?’: ‘insider’ views of the future role of Australian public housing." International Journal of Housing Policy 13.(2): 183-201. Pawson, H., Parsell, C., Saunders, P., Hill, T., Liu, E. (2018). Australian Homelessness Monitor. Melbourne, Launch Housing. Ong, R., Dalton, T., Gurran, N., Phelps, C., Rowley, S. and Wood, G. (2017) Housing supply responsiveness in Australia: distribution, drivers and institutional settings, AHURI Final Report No. 281, Australian Housing and Urban Research Institute Limited, Melbourne, http://www.ahuri.edu.au/research/final- reports/281, doi:10.18408/ahuri-8107301.

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