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home loansAUSTRALIA faces a prolonged housing affordability crisis with the last bastion of cheap housing – new suburbs on city fringes – moving out of reach of most first-home buyers, research shows.

At the end of last year, three out of 10 lots for sale in new housing estates were accessible to average-income first-home buyers, a study of unpublished data from the National Land Survey Program has found.

City fringe subdivisions once provided first-home buyers with prized house and land deals at prices most could afford.

But in Sydney only one out of 10 lots is sold under an industry-accepted affordable land benchmark of $200,000 a lot. And the research has found that situation has existed since at least June 2008.

The loss of affordability has been pronounced in Melbourne as well, with 26 per cent of lot sales meeting the affordability benchmark, down from 90 per cent two years ago, one of the study’s authors, Colin Keane, said.

South-east Queensland had worse affordability than Melbourne, while Adelaide (75 per cent of lot sales meeting the affordability benchmark) and Perth (40 per cent) were the only major capitals building enough affordable housing in new estates.

”Everybody knows that established housing is beyond most first-home buyers … That’s a problem that is now extending to the greenfield frontier as well,” said Bob Birrell, a co-author and Monash University population expert.

Developers have repeatedly blamed soaring prices on dwindling land supply, calling for more rural land to be rezoned for housing and faster planning processes for new estates.

”The reduction of greenfield development capability across Sydney should be complemented by an urban infill strategy which ensures that there is adequate supply of affordable family housing opportunities,” the report said.

If this cannot be achieved, Sydney may lose even more aspiring home owners to other markets. Surging land prices and development bottlenecks have caused a slump in Melbourne’s greenfield land sales.

Residential land sales fell by 74 per cent in the year to September 2010, yet median land prices grew by 25 per cent to $225,750 in the year to last December, despite house blocks getting smaller.

The report’s findings follow Bankwest research showing key workers – teachers, nurses, police and others – face house prices more than five times their earnings in 84 per cent of local government areas in Sydney, up from 77 per cent in 2009.

This was an improvement from 2005, when 95 per cent of areas were unaffordable.

”These are the essential workers which we rely on every day to provide important services and they face the possibility of being priced out of housing in the communities in which they serve,” the chief executive of Bankwest, Ian Corfield, said.

South-east Queensland’s decade-long affordable-housing growth has come to a sharp halt.

Greenfield land prices in Queensland were now higher than Melbourne and ”that’s very significant at a macro level for Australia”, Dr Birrell said.

Poor affordability in Melbourne, south-east Queensland and Sydney could cause people to go to Perth, where new housing was cheaper and the job market better, he said.

The challenge facing the development industry was to keep prices down and maintain a healthy number of homes accessible to first-time buyers, the report said.

Story by Simon Johanson  www.domain.com.au

Tags: economy, first home buyers, marketing, news, real estate

View the original article here

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