A frenzy of buying and selling by existing home owners, but very little new housing stock, added to ease the pressure of renters and first home buyers. That is the story of real estate for 2006-07 according to a new report by the Real Estate Institute of Australia.
The value of homes and apartments bought and sold hit a record high of $209 billion in 2006-07, reflecting that the property market’s activity has reached fever pitch at different times during the year in Victoria, Darwin and Western Australia.
But modest new home and apartment starts have left tenants languishing, with rents increasing by a whopping 12% average during 2006-07 and vacancy rates at record lows.
Mortgage repayments were also pushing some home owners to breaking point, with more than 30% of the median family income required to make average mortgage repayments.
The upshot, according to REIA president Noel Dyett, was a significant 8.3% decline in housing affordability over the year, highlighting the need for further government action in this area.
“‘The REIA looks forward to the introduction of the Rudd Government initiatives including the first home saver scheme, housing rental scheme, and housing affordability fund,” Dyett says.