The impact of future population growth on housing affordability

Housing is a National Asset It is a vital part of the national economy and important generator of employment It is an important generator of household wealth for ordinary Australians, whose home is often their main asset It is home, providing a place of shelter, a location in a neighbourhood and community, and a place to belong.

A National Housing Problem The majority of Australians are housed in good quality affordable housing However 1.2 million households are in housing stress, up 20% from 10 years ago 400,000 households are in extreme housing stress And over 100,000 people were homeless on census night 2006

What is Housing Stress? Housing stress describes a situation where the cost of housing (either as rental or as a mortgage) is high relative to household income. - That’s 1 in 7 Australian households As a general rule a household spending 30% or more of its income can be considered under housing stress, and under "extreme" housing stress if spending exceeds 50%. - That’s 1 in every 20 households Show Me the Money: Financing More Affordable Housing. Mike Berry 2004

Housing stress by tenure - of the 1.2m

How has this come about? Demand for well located housing from established owners has fuelled affordability problems for newly formed and renter households Established home owning households have benefited significantly from increases in the value of owner-occupied housing as well as the value of rental housing A status-quo supported through the tax system

Demand already outstrips supply 1700 new dwellings required per annum Currently turning off 800 lots per year NT Government’s ‘Housing the Territory’ – a new package of measures in recognition that housing supply is not matching demand and prices are out of reach of low to middle income Territorians Land release New Places to Rent - (Affordable Housing Company) New Public Housing

National Decline in Social Housing From 2008 National Housing Supply Council Report

Darwin region Population projections Population114,000154, % 177, % Population of working age 83,000106, % 119, % Population over 60 10,00021, % 28, %

Land Release Bellamack, Mitchell, Zuccoli and Johnston = 3670 lots in next 4 years Muirhead and Berrimah = 2300 lots by 2013 At 1700 per year by 2013 = a deficit of 1000 Then Weddell = 10,000 lots from 2014

Our Housing Market Problem of housing and land supply A focus on home purchase vs rental property development Extremely high house prices and rents Record low vacancy rates Alack of understanding of affordable housing- - Who its for - How its developed and managed

Issues for NT Home ownership at 44.1% vs the Australian rate of 71% The largest percentage of public housing dwellings in the country at 6.8% A gap between the private market and social housing

Where to? Demand side subsidies have proven to be problematic- FHOG/ CRA We need to increase housing supply We need to increase the supply of land We need to keep costs as low as possible We need to reduce planning delays and make better use of the planning system We need to be environmentally efficient We need to develop specialist affordable housing managers/ developers

So what is affordable housing? Housing for rent or purchase that is affordable to households whose financial capacity is constrained Often initiated and owned by non-government not-for-profit providers Financed through a mix of public subsidies and/or planning benefits + private equity or debt finance It is not traditional public or social housing

Who needs it? Low to moderate income households - NRAS household income limits = Single person - $41,514 = Couple w/ 3 children $98,696 Key workers - crucial to economic development Key issues - transport and energy efficiency

Housing affordability – A 21 st Century problem At the economy wide level - Inter-generational inequities - Labour market inefficiency - Potential economic instability At the Individual level - Increasing cost of home ownership - Declining home ownership rates amongst the young - Large numbers in mortgage stress - Large numbers in housing stress in private rental

Ideas to take forward Raising awareness of the impact on economic growth Innovation - Land Trusts/ Shared Equity schemes - Long term supply and affordability strategies Developing Planning System Incentives NFP Housing Associations Partnerships Coordinating the range of policies that affect housing affordability outcomes

Thank you Toni Vine Bromley Executive Officer NT Shelter