Housing

Affordability and
Impact on Future

Sydney and Melbourne

Housing Affordability
condition

Name

Word count: 0
Table of Contents
Abstract.......................................................................................................................................................2
Introduction:...............................................................................................................................................3
Housing affordability:..............................................................................................................................3
Housing affordability condition in Sydney and Melbourne:....................................................................3
Research Objectives:...................................................................................................................................4
The Research Problem and the Future:.......................................................................................................4
Literature Review:.......................................................................................................................................4
Why Housing Affordability:......................................................................................................................5
Government Policies impact:...................................................................................................................6
Research Methodology:..............................................................................................................................8
Conclusion:..................................................................................................................................................9
Works Cited.................................................................................................................................................9

Abstract
The world population is increasing significantly. On the other hand, the place of the living is not
increasing. Most of the world population forced to pay high amount for living. For this reason
huge population of the world is not able to afford house and also not able to meet their basic
needs. Housing affordability is a term which is used in measuring the ability of the people living
in that area to afford housing service of that area. The affordability consists of both the rental and
the owning capacity of the people living there. Increase in the population the Government of
Australia is taking step and making planning to overcome the issue. Australia Budget 2017 and
2018 highlighted this issue and made many policies. The recent Budget presents many policies
that show that Australian Government is taking this issue seriously and making strong policies.
Increase in the population increase in the demand of the houses and increase the prices as well.
on the other hand, increase in the price of the house for living and for rental purpose. The
housing affordability can be measure as the income of the people living in that area and the price
of the house and rental cost in that area. Housing affordability is main issue in Australia and the
main purpose of the paper is to highlight the main issue in the country. This paper also contains
the policies which are made by the Australian Government and their overall impact on the
individual ability to own or rent house and meet the basic necessities of living. In this paper the
Policies which are implemented from the government and the planning of the Australian
Government are evaluated and their future results are presented. For such initiative the many
researchers also recommend the policies for increasing the Housing affordability of the people so
that they can easily own their personal house. Many of the writers present their theory and
planning for the housing affordability and recommend further planning the effectiveness of the
government policies. Current the population which is effecting from not able to meet the basic
living is more than 1 million and if the steps are not taken there is a chance that this figure might
cross 1.5 million. For this purpose the research is made to highlight the issue and compare the
issue with the policies that are implemented. There are some deficiencies in the policies
highlighting these issues and presenting recommendation so that the needs of the 1 million
individual can be meet. From the current recommendation and the policies it might be not
possible for the government to meet the need of 1 million individuals. So some strong decisions
are needed to overcome the problem of the housing affordability.

Key Words: Housing affordability, Budget 2018, Policies, Population, Recommendations,

Australian Government.

Introduction:
Housing affordability:
Housing affordability can be described as the housing which is affordable to those having
median income and the price of the rental and is recognized by the index which is set by the
government as housing affordability index. This compares the individual average income with
the price of the living in that area. The price of the living includes the rental and living expenses.
Due to increase in the population the cost of the living also increased as the rental price and
houses price increase. Due to this reason the housing affordability index become worse. To
overcome such situation the policies and decision should be taken.

Housing affordability condition in Sydney and Melbourne:

The housing affordability index in Sydney and Melbourne is worse due to increase in the
population in these cities. The reason for increase in that the offices of many multinational
companies are situated in these two cities for such reason the housing affordability is showing
worse index. The increase in the population causing the houses in these areas becomes too
expensive so that average income person not able to buy home or rent some space for living.

To control such issue the government of Australia is taking steps and implementing policies.
There is a risk that sufficient steps are not taken on time the housing affordability index might
get worsen. The recent budget shows some policies to overcome this issue but according to the
many writers the issue is too high that the current policies might fail to overcome such big issue.
The writers are explaining the matters and commenting on the current policies. The main aim of
the research is to explain the matter how big is the issue and the further implication from the
government to overcome such issue.

The implementation from the government on this issue are described and evaluated in this
research and further implementations are presented which cover the remaining issues. Researcher
made comment on the policies and explain impact of these policies there are few researcher who
made comment about the future housing affordability index and further implementation from the
government to overcome such issue. The purpose of this research is that measure the issue how
big the housing affordability issue is and if not proper policies are taken the impact on the
country overall and the policies are presented so that issue can be resolved properly.

Research Objectives:
Currently the issue facing by many countries is the increase in the population and due to increase
in the population the increase in the price of the housing affordability. Many of the countries
making strong policies to overcome such issue but in recent budget the Australian government
has taken steps and implemented. This implementation is based on the researchers
recommendation but still there are deficiencies which cannot overcome such a big issue. The aim
of this research is to provide further implementation. Following are the main objectives of the
research paper:

 Overall impact of the housing affordability in the country

 Impact of the housing affordability if not taken actions
 Impact on the people/ people who are getting benefit from recent budget
 Initiative which are taken by the government on this issue
 Impact on the foreign investors

The Research Problem and the Future:

The future aspect of the study is very wide. The reason for the wide scope is that housing
affordability is the common issue in every country. Increase in the population is the common
issue which is causing shortage for the living space. The paper includes many researchers’
theories and their results. The budget 2018 will be analysed in the light of the researchers and
impact on the housing affordability will be presented. It will also produce the implementation
which should be implemented to solve such issue.

In the next part of the paper the issue is described in the light of researchers and their conclusion
is evaluated. The recommendation from them and future if this issue is not taken in to
consideration.
Literature Review:
Increase in the population in many cities put burden on the cities and providing accommodation
to huge population the price of living increase significantly. Currently two major cities in
Australia are facing housing affordability crisis Sydney and Melbourne. Both of the cities are
heart of the country and people living there have to pay enough to meet the basics of living. The
demand of the house increase which alternatively increase the price of the houses. Citizen living
in these cities have to pay extra. Many of the writers suggest their opinion how to deal with this
issue and in the recent budget it reflects the reaction of the government for such big issue.

This paper is divided into two parts in the first part of the report the issue is described how big
the issue is and what researcher think about the issue. In the second half of the paper the
researcher’s conclusion on the policies made by the government on solving this issue and in the
light of the theories what they think about polices and impact of the policies in the future.

Why Housing Affordability:

The reason for increasing in the housing affordability issue is mainly the population. Increase in
the population and it will increase further due to which the price of the houses and basic need of
the livings are not easy for the individual to obtain. According to the survey it is estimated that
the price of the house in Sydney is about 1.12 million. The demand is not matching with the
average income of the person living in the country. The gap between these is too high
government of Australia has taken steps to decrease the gap. For the purpose of buying home the
amount of the loan which is required is too high. For obtaining loan the individual not have
sufficient income to meet the criteria of the loan. This is also the reason that individual cannot
get home loan for buying their own house [ CITATION NSW16 \l 1033 ]. Living in the Sydney and
Melbourne is not easy now a day as it is most expensive. These two cities are considered as the
most expensive in the world and top on the list. The most expensive country to live is Hong
Kong. The demand of the house increases which alternatively means the prices also increased.
The Gap between the income and the house affordability cannot be shrink if proper steps not
taken.

One of the initiatives from the Government is providing affordable houses to the citizen and
consists of many projects. The New South Wales government takes the onus of the project. In
these projects the renewal of the urban societies and producing large amount of the houses to
meet the shortfall of the houses in those areas [ CITATION NSW14 \l 1033 ] . Australia is considered
as the most advance country in the world so country has great responsibility to deal with this
issue and consider this issue in his national action plan. Make policies and framework to meet
the demand of the houses in those countries. The Australian housing and planning minister is
assisting the government and take many actions. These actions include producing many houses
to decrease the demand of the houses and meet the demand of the living in those areas.

The housing affordability is the big issue for the low-income citizen. The policies are developed
for low income persons so that they are able to meet the basic need of the life. Proper planning
and proper decision should be taken to resolve such issue. It should be state’s responsibility to
take relevant action to meet the demand of the people. Many of the states in Australia are doing
well and meet the demand of the citizen but some of the states are facing huge difficulties the
reason for this is that the increase of population in such cities are high. So the state of such area
should do take steps to meet the demand of the citizen [ CITATION Ste1 \l 1033 ].

The house mortgage is also increased, the income of the person is low as compare to the
mortgage and they feel burden on the payment of the mortgage amount [ CITATION Rob09 \l 1033 ].
Lewis in his research mentioned that the steps that are taken by the government is not enough as
they are not taking essential steps which are required. They have to produce large amount of the
home in that areas. Producing large number of houses cause increase in the house and result will
be decreasing in demand and price of the houses will decrease in this way the gap between the
income and the price of the house can be shrinking [ CITATION Pet18 \l 1033 ].

According to the survey it is reported that there are about 40 % of the Australian population is
living in Sydney and Melbourne. According to the figure increase in the price of the houses since
2012 is very significant. It is reported that about 40 to 70 % of the price are increase in the
houses but the income of the citizen living in these areas not increase this much. Instead of the
decreasing price of the homes government should make homes to meet the demand of the homes
this will result in decrease in the price of the houses. In this way homes are easily available in the
reach of individuals [ CITATION SOP18 \l 1033 ].

From the past two decades the government has not taken enough steps to lower this issue. They
were taking some easy steps to deal with such issues and selected easy steps. These easy steps
are not enough to meet the demand of the house. The politicians are not interest in such issue the
reason is that they not want to angry their voters by decreasing their houses price. The people
living in these areas are also not want changes because price of their houses will decrease. Due to
this reason from the past two decades the price of the house is increasing significantly [ CITATION
Joh15 \l 1033 ].

Government Policies impact:

After the implication of the new policies the 87 % of the Australian believes that their future
generation will not be able to meet the needs of housing. According to the poll 87 % of the
population showed their concerned that they are not able to buy home. 63 % of them said they
are not able to meet the requirement of the homes [ CITATION Kna17 \l 1033 ]. This is not the
problem of the younger Australian the elder one is also facing this issue as they are not benefited
by the budget and they feel that this is going to be worse.

In the past decade the housing affordability is hot topic in Australia. Not only politician but the
citizens are more concern about this issue. According to the stats the population is increased
significantly as compare to other cities of the country.
 Image source ABS

The population in the cities in increasing significantly and the rate of the employment is not
expanding as compare to this. For this purpose, serious concern is required by the government.
And the stats of the employment show that increase in the employment in these cities is also high
as compare to other cities so mostly people are preferring to move to the capital cities [ CITATION
The18 \l 1033 ].

Image from ABS

The impact of the housing affordability policies is not good in the first quarter of the 2018. The
mortgage price increase and the income of the citizen not increased as much the cost increases.
Price of the houses increasing significantly and the government fail to meet the demand of the
citizen. Increasing the mortgage price and increasing in the demand creating critical shortage of
the houses for living and the government in the first quarter of the century fail to deal with this
issue. According to the researchers the mortgage will weaken the housing affordability further
and it will also cause increase in the price of the houses. On the other hand the income of the
individual is not increasing in the same pattern. In the very first quarter the price of the mortgage
increased by 5 % during the first quarter in 2018. And it is estimated that further increase can be
seen this would weaken the housing affordability index more. The price of the median home
increases due to increase in the mortgage and the researchers agrees that housing affordability
index will fall more because the price of the houses is increasing much faster as compare to the
income of the individual [ CITATION Dia18 \l 1033 ].

The solutions which are presented by the government are not enough and sadly that they are not
effective as they should be. The government had not seen this issue as it is and might ignore such
big issue. Due to such reason many of the individuals not able to meet their basic necessity of the
life. Only 11 % of the county population is facing the issue which is huge ratio if we come to two
cities because majority of them belong to these cities and almost all of them belong to these two
cities [ CITATION Lyr18 \l 1033 ].

Many of the researchers present their solution and recommendation and they are shown in the
policies of the government. But the issue is huge for such reason the government has to shift
many offices outside these areas so many of the person living in these areas can live outside the
city and can afford their basic living of life. On the other hand the loan and the mortgage should
be easily accessible to every individual so they can buy their own house [ CITATION Liz18 \l 1033 ].
People living in the Sydney and in Melbourne have to pay 12 times more amount as compare to
the other cities. The housing affordability index should be revised in these areas. Most of the
multinational offices should be shifted to the native areas so that they can manage the population
and burden on the cities can be shared by the native city [ CITATION Gra17 \l 1033 ].

Research Methodology:
The research is based on the issues which are faced by many counties. To solve this issue the
countries are making their policies and in the recent budget the Australian government has taken
steps to better the condition of the Housing Affordability this research is based on the
explanation of the policies and their impact.

This mixed approach paper as this will measure the issue in these two areas but large of the data
is qualitative as this will describe the impact of the policies of the research and this also describe
the issue in future prospects.

The data which is analysed in this paper is the research that is made from the researchers.
Analyzing that data and presenting the conclusion based on the theories so the data which is
analysed in this paper is secondary data.
This paper is based on the analysis and impact on the cities so it will analyse the data from
different sources and present analysis. In this research there is no need of the questionnaire and
interview.

The basic aim of the paper is to present impact of the housing affordability in future and impact
of the government policies and any recommendation. The question is still valid in this point is
either the government has taken enough policies to overcome such issue or not.

Conclusion:
The housing affordability is not issue in just Australia (Sydney or Melbourne) it is facing by
many developed countries due to increase in the population of the country. Many of the countries
have made strong decision on timely basis and are not affected by the issue and their median
income is high as they can afford house in those areas. But this is huge issue and government in
the recent budget has taken step are not enough as they might work for short period of time they
should take strong policies and establishing new office in that areas should be banned by the
government. The surveys from the researchers also suggest that the situation getting worse and
there is a risk that government might fail to overcome this issue. Developing new building block
can solve this issue in some way but the main issue is availability of the land. The land is
available in the adjacent areas. The issue is not solved can cause huge problem for the future
generation and they also not able to meet the demand of the housing affordability. Writers had
mixed opinion on the policies taken by the government some of the writers believe that situation
is temporary and it will change in positive manner in the future but according to the other writer
they believe that situation will not get better and it will create further problem in the future. In
this study huge research is still needed and proper planning is required from the government to
share the burden in other cities equally.

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