Affordable Housing In Australia: Challenges And Strategies

How should the Federal Government address Australia's housing affordability problems? The Federal Government affects housing demand and supply in many ways from taxation policy through to funding for social housing construction. Briefly explain the ways in which the Federal Government currently intervenes in the housing system, and identify potential strategies which the Commonwealth could introduce to improve affordability for key groups (such as first home buyers)

Housing that is considered to be affordable is the housing that is deemed to be affordable to those who have a household income that is median (Bhatta, 2010). The level of income and affordability of housing is rated in the country, region, state or province, or a particular district by a Housing moderateness list that is perceived.

The National Housing Affordable  Summit Group in Australia built up their meaning of lodging that is moderate. Their definition was that cheap lodging is lodging that is thought to be sufficient in its standard and its area of lower or the center wage family units and furthermore it ought not to cost more than the family unit can pay. This tends to imply that it ought not to cost so much that a family can't meet the other fundamental needs that the family is probably going to confront on the premise that is manageable.

The decision of lodging in a specific area is a reaction to the outrageous and complex arrangement of social, mental and financial driving forces experienced by people in a specific area (Hulchanski, 1995). An illustration is a point at which a portion of the families spend a greater amount of their earned salary on lodging basically on the grounds that they feel that they can bear the cost of the lodging while a few of the households tend to lack a choice (Luffman, 2006).

In Australia housing tends to be so expensive, this is mainly because Australia has for years been failing to meet the needs of housing for its residents who are low-income earners. The housing situation in Australia has been getting worse steadily. The present leadership and the government should, therefore, take some steps to help remedy the problems and challenges of housing.

The government, therefore, needs to employ strategies that will deliver the much-needed reforms across the housing sector (Mulliner, 2013). Some of the sectors that need reforms include the taxation sector, social housing sector, the homelessness system and the income security sector. This should be done together with consulting the minister of the cabinet level who has the authority to coordinate different institutions and should also be supported by the strong Australian government and the institutions of the community sector. Therefore to help solve the housing problem the government should employ a coherent national strategy that will help deliver housing that will be more affordable and help end homelessness in the Australian society (Winnick, 1995).

Housing Affordability in Australia

To determine the strategies that the Australian government should undertake so as to solve the housing affordability problem it is important to examine the factors that lead the high prices of housing in Australia. A portion of the elements incorporate statistic moves, supply, and interest for lodging, moves in monetary arrangements and advancements in money related instruments and the set open strategy.

In this way for the national government to adequately take care of the lodging issue, it needs to check the movements in socioeconomics. Socioeconomics involves the declining number of individuals per a specific abiding, the developing Density scope, and territorial urbanization, strong populace development an illustration is the point at which the costs of lodging in Australia rise they, in turn, push the demand for housing high.

The government should employ policies that will try and limit and control the number of people in a particular area. This is because when the demographics shift and a particular area ends up having a large population, the demand for housing increases and in turn the prices also increase. The increase in prices, therefore, leads to the housing to be unaffordable (Walks, 2014).

The other cause of the change of cost is the changes in the supply and demand of housing units. When there is a limitation in the number of dwellings in a particular area compared to the number of households, the demand becomes more than the supply, therefore, higher prices and vice versa. Smaller housing units lead to the supply of housing units to be more than the demand and therefore lower prices. And the strong desire for home ownership leads to the demand for housing units to increase and therefore higher prices. The federal government can, therefore, address the affordability problem by offering incentives which will encourage the construction of more housing units in the lower process. With the increase in the supply, the prices will eventually fall due to the forces of demand and supply in the market.

The other factors that affect the price of housing are the movements in monetary strategies and developments in money related instruments. The shifts include the reduction in the profitability levels of other forms of investment in the market, the level of interest rates in the market, the availability of the different forms of housing finance and the innovations in the mortgage markets (Andre, 2010).

When profitability in the other forms of investments reduces, the investors will shift their attention to the housing sector. This will, in turn, lead to increased housing in the market and turn low prices. Also, some of the investors tend to raise the rents if the profits of other forms of investment reduce so as to remedy the losses. When housing finance is available, many people will be able to build their homes, and therefore this will help solve the housing problem in Australia. Also, the presence of innovation in the mortgage market sector will help people to acquire homes.

Challenges of Affordable Housing in Australia

The federal government should, therefore, ensure the market is favorable for the Australian households to acquire homes (Maliene, 2009). This can be achieved by the government creating more sources of housing finance. This can be done through the government providing insurance for the risky borrowers or incentives for the financial institutions to give more credit.

The government should also encourage the financial institutions to lower the cost of borrowing. This will lead to increased investment levels. When investment increases the income earned by the households will increase due to the more jobs created and in turn the people in Australia will be able to afford the houses. This will, therefore, solve the housing problem in Australia.

Public policies such as land utilize zoning, deregulation and critical expenses impose and charges by the Government on new lodging units in Australia additionally fundamentally affects the affordability of housing in Australia. So as to encourage more home and to increase the affordability of houses in Australia the government of Australia should reduce the taxes on the houses. This will help solve the problem of houses affordability.

The federal government of Australia affects housing demand and supply in several ways that include taxation and funding for social housing construction. Housing supply and demand entails some housing units in the market and the number of housing units the people in a particular region need.

In some countries meeting the growing demand of the supply housing stock has been difficult for the markets. The demand has steadily increased for affordable housing mainly the rental housing for the middle and low-income earners in Australia, but the supply has largely been constant (Mostafa, 2006). The potential people who desire to buy homes are therefore forced to turn their attention to the rental markets, which is also under immense pressure (Yates, 2011).

The demand and supply of household is mainly affected by the demographic and behavioural factors in the community, building codes (Listokin, 2005), migration which mainly entails rural to urban migration where people move to seek potential employment, the increase in the life expectancy of the people and this leads to the population to be high, exclusionary zoning, the greater propensity of people to leave alone, government policy such as tax rates and funding for social housing construction and young adults who tend to delay to form their households and this is mainly in the advanced economies.

In Australia taxation is used by the federal government to the demand and supply of housing units. When the demand is too high than the housing units in Australia the government reduces the tax rate and this, in turn, encourages more people to invest in the housing sector due to the expected high returns and low tax cuts. This will, therefore, increase the supply of housing units to meet the market demand.

Strategies for Creating Affordable Housing in Australia

The federal government of Australia also uses another policy in controlling the demand and supply of households through the funding of social housing construction. Social housing construction is a housing mechanism whereby the government builds rental houses which are then managed by the state, non-profit organization or by both the government and a non-profit organization. The purpose of social housing in Australia is to provide affordable housing that meets the demands of the low and middle-income earners (Luffman, 2006). Social housing is therefore used by the federal government to build the supply of lodging and at a similar take care of the demand of the general population.

In Australia open lodging is given by the branches of the state governments and the subsidizing is given by both the elected and state governments. There are around 300 000 open lodging abodes or more in Australia. General society lodging homes, for the most part, comprised of internal city skyscraper lofts situated in Sydney and Melbourne. And furthermore, low-thickness lodging on the ace arranged homes in the Australian suburb zones.

Ways in which the federal government currently intervenes in the housing system.

In Australia, the approach producers at the national government have been endeavoring to react to the issue of reasonable housing. The issue is a worldwide emergency and exceptionally complex with a heap of instruments of arrangement made. The reactions of the government run from the stop-crevice apparatuses of financing to the long haul intergovernmental mediations (David, 2006). People in general approaches shaped are educated by the fundamental presumptions about the lodging nature itself. A few inquiries wind up being asked on whether lodging is an essential need or a privilege, an open decent or qualification (UNESCAP, 2004).

The central legislature of Australia as of now address the test of reasonable lodging by open arrangement instruments that tend to concentrate on the request side of the market and advancement of projects that are probably going to help the families achieve a money related benchmark that is probably going to make the lodging moderate. This is a result of the connection between pay dissemination and minimal effort of leasing (Rodda, 1994)

A portion of the strategies that the national government utilizes incorporate the methodologies that enhance the level of financial development when all is said in done. This is because, on account of a more grounded economy, higher wages and higher business rates the capacity of the family units to secure lodging at the market rates is enormously expanded (Molina, 2017). The approaches of the national government characterize contract loans and saving money homes administrative measures that tend to influence the building materials, the duty and expert practices (Young, 2004).

The government utilizes strategies to expand the obtaining energy of people through monetary and expense approaches that outcome in the diminishment of the cost of acquiring and home loans. The strategies may likewise incorporate the usage of the appropriation projects and examples for motivators for the normal families.

It is however questioned if the lodging market lessens the convergence of neediness. Information data is to be utilized to contrast or interweave and the acquired contracts of the national lodging endowments and the section, improvement of low-pay lodging and the exit (Owen, 2015).

The potential strategies that the Commonwealth can introduce to improve the affordability to key groups such as the first home buyers

Some of the potential strategies that the Commonwealth can introduce in the improvement of housing affordability include the embedded value in public land in estates of public housing being regenerated into new housing systems. This includes estate redevelopment into living in higher density. This uplifting of the values of land won’t be costly to the government (Gurran, 2015). The Commonwealth should also employ the use of the model of glass half full. The model simply states that in cooperation of the sectors of the public the authorities will be able to take the housing estates of the public and then redevelop them into new brands of housing units. The Commonwealth will, therefore, be able to sell the new units to new homeowners and investors. This model can fund new units for tenants in social housing with no new costs.

The Commonwealth should also employ policies such as giving cheap loans and different government incentives which will encourage the different home buyers to prefer the suburbs new homes.  This strategy should be combined with a range of policies of land release, and industry construction vigorously. This will, therefore, increase investment in the housing sector (Gurran, 2013).

An attractive approach that the government can employ is the use of inclusionary zoning. Inclusionary zoning entails a mandate of selling the housing units fractions to a particular selected groups in a price which are below the market cost. This will help solve the affordability problem to the new home owners. This will help encourage developers to develop new affordable homes. Inclusionary zoning will also ensure that the cost of acquiring new homes for new homeowners is reduced. Another policy is that of exclusionary zoning that entails the limiting of density, unwanted land uses, and business.

Another policy that can be employed by the government is that of compensation for the civil service in the few selected areas whereby the income of the people is not a reflection of the costs of housing. This is because the areas that have housing prices which are high tend to have difficulties in the recruitment of teachers and other necessary workers in the provision of essential services. Therefore in these areas, the society tends to subsidize the needs that are no longer needed by the wealthier members of the community (Powell, 2004). The government should, therefore, focus on the compensation of the important workers in this areas. This will, therefore, make a living in the selected areas more affordable.

The government should focus on encouraging the market innovation use. This change includes the use of location efficient mortgages. This encouragement by the government should be done based on the fact that not all affordable housing practices are initiated by the public sector. This, therefore, means that the government should partner with the private sector such as the mortgaging institutions in dealing with the housing affordability problems. The mortgages will, therefore, enable more people to acquire new homes at an affordable price.

The government could also offer housing vouchers which are flexible to the households. The vouchers should also be given to those who are in need so as to be used for the payment of mortgages and rent payments. Since the program is to be local, it will help to reduce the time of response and lead to participation increment. It will allow for the local areas to assess the problems o0f affordability they face, and therefore effective solutions will be created.

The government should also employ policies that will help increase the supply of housing. Some of the policies that can be used by the government include the offering of financial assistance in the housing costs. This will in turn help reduce the rental stress.  

The government can, therefore, employ several policies in solving the affordability problems. The policy makers in the different levels of government should, therefore, focus on the various policies so as to make housing affordable to its citizens. All levels of government and the private sectors should, therefore, work closely

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