Nicki Hutley - URBIS

SOCIAL HOUSING

AUSTRALIA’S GREATEST CHALLENGE?NICKI HUTLEYDIRECTOR AND CHIEF ECONOMIST1 DECEMBER 2016

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1. HOUSING AFFORDABILITY… WHAT AND WHY2. ARE WE IN A NEW PARADIGM?3. POLICY POTENTIAL4. CONCLUSIONS

TODAY’S AGENDA

AFFORDABILITY -WHAT AND WHY

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AUSTRALIA’S ‘ENVIABLE’ ECONOMY

Source: ABS

-1%

0%

1%

2%

3%

4%

5%

6%

-1%

0%

1%

2%

3%

4%

5%

6%

Qrtly Change Annual Change Long-term average

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WE ALL KNOW THIS STORY

House price index

Source: ABS

*2011/12 = 100

40

60

80

100

120

140

160

2004 2006 2008 2010 2012 2014 2016Sydney Melbourne Brisbane Perth Australia

Demographia 2015 – 2 of 51 markets in Australia ranked “affordable”

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THE FULL STORY

100

110

120

130

140

150

160

170

180

190

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Residential property prices Nominal GDP per capita

Average weekly earnings

Source: ABS

*September 2005 = 100

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THE DREAM IS OVER Australian home ownership

Source: Melbourne Institute HILDA survey

64%

65%

66%

67%

68%

69%

WA

SA

Vic

NSW

QLD

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RENT OR OWN?

US RESEARCH SHOWS THAT HIGH HOME-OWNERSHIP AREAS HAVE:

LOWER LABOUR MOBILITY

LONGER COMMUTE TIMES

LOWER RATES OF BUSINESS FORMATION

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THE SIZE OF THE PROBLEM

NSW Vic. Qld SA WA Tas. NT ACT Australia

Greater capital city 54.4 45.2 48.2 34.7 46.4 38.2 38.5 31.7 47.1

Rest of state 29.0 31.9 47.0 27.0 29.9 26.0 34.7

All households 43.3 41.6 47.6 33.2 42.9 31.5 35.5 31.7 42.5

% of low-income households paying > 30% rent (2013-14)

Your text here

Tenth income decile 62%

575,0000 households across Australia

205,000 in NSW

A NEW PARADIGM?

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REDUCE COSTS INCREASE INCOME

CAN WE MAKE MORE HOUSING AFFORDABLE?

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HOUSING COSTS: DRIVERS

LAND LABOUR GOVERNMENT CHARGES

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BOUNDLESS PLAINS TO SHARE?

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HOUSEHOLD INCOME DRIVERS

WAGES UNEMPLOYMENT FULLTIME/PART TIME AND HOURS WORKEDPARTICIPATIONINDUSTRY STRUCTURETECHNOLOGY

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WAGES AWE ($ and annual % change

Source: ABS

0%

1%

2%

3%

4%

5%

6%

7%

500

600

700

800

900

1,000

1,100

1,200

$ (LHS) Annual growth (RHS)

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THE 'LEISURED CLASSES’?

Source: ABS

61%

62%

63%

64%

65%

66%

67%

3%

4%

5%

6%

7%

8%

9%

Unemployment rate (LHS)

Pariticpation rate (RHS)

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STRUCTURAL LABOUR FORCE CHANGES

Employment (‘000s)

Source: ABS

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

Full time ('000) Part time ('000)

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THE DIGITAL ECONOMY

POLICY POTENTIAL

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WHERE HAVE WE GONE WRONG? … I THINK IT IS FAIR TO SAY THAT A GROWING

NUMBER OF PEOPLE WHO HAVE LOOKED AT THE

FIGURES HAVE TENDED TO AGREE THAT A GOOD

MANY WELL-MEANING POLICIES INVOLVING

HOUSING MAY BE PUSHING UP PRICES TO SUCH AN

EXTENT THAT THE NEGATIVE SIDE-EFFECTS ARE

MORE HARMFUL THAN THE PROBLEMS THE

POLICIES WERE INTENDED TO CORRECT.

Robert Bruegmann, PhD, University of Illinois, Chicago

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SOLUTIONS

INCREASE SUPPLYREDUCE (UNIT) SIZERAISE DENSITYEMBED IN DEVELOPMENTREDUCE COSTSSUPPORT THOSE IN NEED

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SHOW ME THE MONEY

OWN OR RENT?PUBLICNFPPRIVATE SECTOR

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CONSIDER ALL THE BENEFITS

HOUSING STABILITYEMPLOYMENT OPPORTUNITIESIMPROVED HEALTH OUTCOMESREDUCED HOMELESSNESS ENVIRONMENTAL SAVINGS

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OLD PROBLEM, NEW THINKING?

IN DEALING WITH MOST DISADVANTAGED, PROVIDE SOCIAL AND HOUSING SOLUTIONS IN COMBINATION PAYMENTS FOR OUTCOMES APPROACH

TO CONCLUDE

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NO MAGIC BULLET

A MULTI-FACETED PROBLEM THAT REQUIRES A MULTI-FACETED RESPONSE

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THINK OUTSIDE THE BOX

THANK YOU@NICKIHUTLEY