Aussie homeowners are celebrating, but renters are crying into their takeaway coffees! Property prices in Australia have gone on a wild ride, jumping a whopping 8.3% in the last year.
This price surge is all about supply and demand. There simply aren’t enough homes to go around, and that’s pushing prices sky-high. Imagine a crowded pub on a Friday night – everyone wants a seat, but there aren’t enough to go around, so the price of a pint goes up!
Experts say the situation in Australia is even worse than in the UK, with Aussie house prices ranking 22nd out of 33 OECD countries for affordability. That means Aussies are paying more for a place to live compared to many other developed nations.
May’s Price Spike
The price of Aussie homes didn’t just creep up, it took a leap in May, rising 0.8% in just one month. That’s about an extra $12,000 on the price tag of your average Aussie home, which is roughly £6,250.
Sydney Leads the Surge
Perth and Adelaide are experiencing some serious price jumps, but Sydney is leading the charge. The median home price in Sydney has reached a record high, matching the peak from January 2022. That means the average Sydney home is now worth a staggering A$1.16 million, or around £600,000!
What Can Be Done?
Professor Rachel Ong ViforJ, a housing expert at Curtin University, says the solution isn’t just building more homes. She suggests they should also look at making better use of existing homes by:
- Encouraging empty nesters to downsize: If those with extra bedrooms are willing to move into smaller spaces, it frees up more homes for families.
- Tackling the Airbnb effect: Short-term rentals can eat away at the number of long-term rental properties available, driving up rents and making it even harder to find a place to live.
- Unblocking red tape: Making it easier for builders to construct new homes could help ease the pressure on housing supply.
- More social housing: Building more homes specifically for low-income families can ensure everyone has a roof over their head.
- Smarter planning: We need to plan for a mix of different types of housing to meet everyone’s needs.