The Australian Greens have called for urgent action in response to new housing figures showing Australian cities are among the least affordable in the world.
Greens housing spokesperson, Senator for Western Australia Scott Ludlam, said it was "inexcusable" that Australian cities were among the most expensive in which to live.
"Out of 325 markets assessed by the Demographia International Housing Affordability Survey, Perth is ranked 291st. While the survey considers housing to be affordable when the price to income ratio is 3.0, the median house price in Perth is 6.3 times greater than the median gross annual income. It's harder for people to buy their own property in Perth than in New York City," he said. "Melbourne, with a price-income ratio of 9, is 321st and Sydney, with 9.6, is 324th. And you'd be better off trying to buy a property in London than in Geelong."
Senator Ludlam said "there is a contradiction between the Government's work on affordable housing and Government's actions that provide incentives designed to benefit investors and speculators and to keep house prices going up".
"There is a tension between the idea of housing as an asset class, which demands appreciation and ever-increasing returns, and the notion of housing as a human right, which requires stability - not property bubbles," he said.
Over the last ten years Australia has seen a 250% gain (or a 9.5% annual rise) in residential property prices (Fitch Ratings Australia Outlook Report). In recent years the Government has operated a number of initiatives aimed at bolstering home prices, including the first home buyers scheme, and generous capital gains and negative gearing incentives for home owners and property investors.
The 2008 Senate Select Committee on Housing Affordability in Australia found that $50 billion is spent every year on capital gains exemptions and negative gearing incentives. Another $13 billion has been spent on the first home-buyers grant since its inception in 2000. This compares to Government spending of $512 million Housing Affordability Fund to be spent over five years to improve the supply of new affordable housing.
"What is Minister Burke, who is responsible for affordable housing, telling the rest of the Government about the impacts on housing of the tax policies that have been inflating the bubble? What is Minister Arbib, responsible for social housing and homelessness, telling the Cabinet he needs to accommodate the 300,000 people currently on the social housing waiting list?"
"The Government clearly needs to restore its dedicated housing minister in this time of crisis, with housing as a stand-alone portfolio that is not distracted by other responsibilities. The carve-up of the housing portfolio under the Gillard Government is unfathomable. This is a serious problem that needs serious attention."
Senator Ludlam said the enormous pressure on Australians hoping to own their own homes took a heavy toll.
"When a family or an individual has to spend so much of their income on paying their mortgage, it has a seriously adverse affect on their education and training opportunities, on their investment opportunities and on their ability to pay for services like health care and child care," he said.
"We also should not forget the impact of unaffordable housing on private renters either. Higher prices in the housing market are simply passed on to renters. Rental affordability has reached crisis point in Australia. In 2010 the National Housing Supply Council identified a gap of 493,000 affordable and available rental properties across Australia."