“The brutal truth is that, as a result of the increases in Canberra house prices over the last five or six years, any family whose gross household income is below $120,000 will never ever be able to afford a detached house.,” writes columnist JON STANHOPE
THE median price of a detached house in Canberra has hit the million-dollar mark.
The great Australian dream, a comfortable house on a quarter-acre block, is for many Australians, including in rapidly increasing numbers here in Canberra, a long abandoned and painful pipedream.
There are almost daily reports of new million-dollar-plus record house prices in, it seems, nearly every suburb across Canberra. These reports invariably convey a sense of joy and excitement, almost orgasmic in nature, at the apparently endless rise in Canberra house prices.
The Canberra median house price has, I understand, overtaken or at least is about to overtake that in Melbourne, which will make it the second highest in Australia and we are in hot pursuit of Sydney for the overall title.
Keeping in step with the increase in the value of houses in Canberra is the cost of rent where we have, remarkably, already left Sydney floundering in our wake and have the highest rents in Australia.
I acknowledge, in the interests of transparency, that along with the rest of home-owning, middle-class Canberra, that my house has also almost certainly increased in value by a cool couple of hundred thousand dollars in the blink of an eye and without me having to do a thing.
I understand, of course, how satisfying the accretion of wealth can be and how gratifying it must be to be able to leave an extra fistful of dollars to the kids when one drops off the perch and the house is sold.
Any possible pleasure that I might have at the runaway increase in the value of my house and indeed all detached housing in Canberra is severely tempered by the deep concern I have at the consequences of this out-of-control explosion in house prices for young families, lower-income households and people for whom life is already a struggle.
I find it genuinely distressing, as do many of the people who regularly approach me in the street to lament the implications of the massive increase in prices we are witnessing, for their children and grandchildren.
The brutal truth is that as a result of the increases in Canberra house prices over the last five or six years it is almost certain that any Canberra family whose gross household income is below the median of around $120,000, in other words as many as 40 per cent of residents will never, unless they are already in the housing market or have family support, ever be able to afford a detached house in Canberra.
While a diverse range of factors, including most particularly low interest rates and bizarrely the COVID-19 pandemic, have contributed to the increase in house prices, it is the fact that the ACT government, which has a monopoly on the supply of land in the territory, took the decision five years ago to reduce the amount of land available for the construction of detached housing from 70 per cent of all land released to a mere 30 per cent, which created the conditions for the perfect storm in house-price increases that we are experiencing.
When the government took the decision to dramatically reduce the supply of land for houses in favour of apartments I was perplexed by how little attention it paid to the obvious impact the decision would have on housing affordability and hence lower-income households and, by extension, in widening inequality in the Canberra community.
I remain concerned at not only the apparent complacency and lack of interest of the ACT government about the role which current land supply policies have in widening inequality in Canberra but also that many of us on the up-side of the increase in inequality are regrettably and perhaps selfishly far too sanguine about the negative impacts of current land supply and housing policies which, admittedly, we endorsed at the recent election.
An interesting sign of the impact that ACT land-supply and housing policies are having was a recent report noting that on average 47,000 people cross the ACT border from NSW on each working day of the week.
The Canberra diaspora is increasing at a remarkable and arguably alarming rate. Accepting that many of these people will have chosen to live in NSW for lifestyle reasons, many more have certainly chosen to leave Canberra and live across the border because of unaffordable land and house prices.
While the warm inner glow we all experience at our local leadership in addressing climate change – including through a commitment to the densification of our city – it is somewhat hypocritical and perhaps pyrrhic if in the process we have encouraged or even forced tens of thousands of residents to commute, in some instances up to 200 kilometres a day, from their new affordable homes, to work and back every day.
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