Housing affordability a big issue for 67 per cent of Aussies

It’s one of the things Aussies care most about. Now it could be the ultimate factor in deciding who will be the next Prime Minister.

As the election campaign continues, the issue of the cost of living remains front and centre in the policy narratives coming from both the major parties.

While the cost of living is always a feature of election campaigns to some degree, the severity of the issues the nation faces with inflation and rising interest rates have led them take on a degree of importance that hasn’t been seen in over a decade.

Of all the various cost of living issues facing Australians, the Morrison government chose to place its focus on fuel prices, by cutting the federal government’s fuel excise tax by half or 22 cents per litre.

But while petrol prices may be the most obvious cost of living concern for Australians, with exactly how much extra our wallet is being lightened up in lights at petrol stations every few kilometres, there is another major cost of living issues many voters say is the most important to them.

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Scott Morrison Anthony Albanese are both placing emphasis on cost of living. Picture: Toby Zerna; Naomi Jellicoe/NCA Newswire

According to a recent poll conducted for the Property Council of Australia, more than half of 18-34 year olds say housing affordability will be an important issue in deciding their vote.

With the national median house price up by more than 25 per cent during 2021 to more than $1,066,000, it’s easy to understand why aspiring homeowners feel like they have been left behind.

In terms of deposit requirements, the price tag of the traditional 20 per cent deposit rose by $42,850 to over $213,000.

Amid a year which held one of the largest ever annual percentage gains for homeowners, household wages in inflation adjusted terms went backwards at the fastest rate since the introduction of the GST over 20 years ago, excluding the initial shock of lockdowns.

2021 saw wages go backwards but house prices skyrocket.

As the task of buying a home becomes even more challenging, a large majority of people are seemingly concerned about their fellow Australians being able to afford a home.

– 68 per cent of people surveyed for the Property Council poll stated that those who don’t currently own a home may never be able to buy one because the cost is so high.

– 68 per cent believed that the only way some people will get to own their own home is through financial support from parents.

– 67 per cent stated that the Australian dream of home ownership is now out of reach for most Australians.

The level of concern expressed over the issue varied quite widely between the various demographics, with significant differences between women and men, as well as respondents from the different states.

For example, 75 per cent of respondents from Queensland believe that some people will only be able to own their own home through financial support from parents, compared with just 60 per cent of those from Western Australia.

Meanwhile, there was a similarly large gap between male and female respondents on some of the key questions. With 73 per cent of women saying that they were concerned that younger people will never be able to buy a home, compared with just 62 per cent of men.

With 67 per cent of respondents saying that the Australian dream of home ownership is now out of reach for most Australians, one would imagine that alarm bells are going off in the halls of power.

Women in particular believe home ownership is out of reach.

Home ownership is after all a key element in a society. In the words of the findings of a Senate Committee into housing affordability, “access to affordable and quality housing is central to community wellbeing. Apart from meeting the basic need for shelter, it provides a foundation for family and social stability, and contributes to improved health and educational outcomes and a productive workforce. Thus it enhances both economic performance and ‘social capital’.”

With housing affordability a major social and political issue, seemingly particularly for female voters, it may continue to rise to prominence in the election and beyond.

United Australia Party (UAP) leader Clive Palmer certainly believes that affordable mortgage rates are a political winner, with Palmer recently announcing a plan to cap mortgage rates at 3 per cent.

While the proposal is yet to prompt a response from the major parties and economists believe that it is unworkable, the UAP has recently gained some ground in the polls, with its share of the primary vote rising to 4 per cent according to Newspoll.

Despite warnings from economists that the UAP plan would add to inflationary pressures and significantly reduce the availability of credit if introduced, it’s entirely possible that the proposal could gain a measure of political traction as concerns over housing affordability and rising interest rates continue to build.

Currently interest rate futures are pricing in an RBA cash rate of around 3.1 per cent by the middle of next year, a full twelve 0.25 per cent rate rises over the next 14 months. After no RBA interest rate rises in almost 12 years, it could be quite the shock for some households, particularly those who have never experienced a rate rise in the life of their mortgage.

Ultimately, housing affordability and the rising cost of servicing a mortgage are likely to be significant political issues for the foreseeable future. Whether they come to the forefront in this election cycle is anyone’s guess, but with more than two thirds of people expressing concern about future generations struggling to own their own home, its future importance as a political issue is all but guaranteed.

Tarric Brooker is a freelance journalist and social commentator | @AvidCommentator