New data from Proptrack AU shows that a median income household ($118k p.a.) can afford to purchase just 15% of homes nationally in FY2025.
📉This percentage will quickly reduce, now that the entry-level market is being rapidly boosted by the 5% Housing Deposit Guarantee.
Victoria remains slightly more affordable than average at an 18% share, mainly because it saw many number of cheap apartments and greenfield homes built historically, keeping the median price of established homes lower. Median dwelling price is not a like:like measure.
But rather than embrace these inherent opportunties, Victorian Government continues to: • slow down greenfield releases (and fail to fund infrastructure in new areas) • avoid addressing the structural planning and authority issues preventing unlocking scale middle-ring development • increasing development costs and charges
and instead pushes the high-cost activity centre apartment development program.
The solution from all governments continues to be to increase development costs and taxes, and promote more expensive types of construction.
Yet, if we adopt the 6x income rule from Australian Prudential Regulation Authority, that median income family can borrow just $708k.
💸This means the price of new homes being pursued by State Governments remains well above the levels required for an average household to afford them.
🤔 Price point really matters, and that is what we should be solving for. Relaxing zoning and planning laws won‘t fix this problem.