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