17-05-2015, 10:46 PM
Million-dollar median a real risk
Samantha Hutchinson
460 words
15 May 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.
Sydney's rising property values could trigger a social crisis of an entirely different order: labour.
The median house price in Australia's most expensive city is on track to surpass $1 million before the end of the year, according to the Real Estate Institute of NSW.
A $1 million median will put the city at risk of losing essential service workers, including teachers, nurses and firefighters, and women who cannot afford to buy homes in the city where they work, experts say.
Sydney's median now is $914,056, after rising 3.6 per cent in the first quarter of the year.
"If the current trend continues, by the end of the year we will see property prices hit the $1 million mark," REINSW chief executive Malcolm Gunning said.
"Given the average person in NSW had yearly earnings of $77,600 in the last quarter of 2014, even in a two-income family, who can afford a house in Sydney?"
The middle class has increasingly been pushed to the city fringes in past years as asset values and rents on properties close to the city rise, resulting in long commutes and a growing preference for regional centres where property is more affordable and jobs can be found.
The ultimate damage is wrought on productivity, National Shelter chief executive Adrian Pisarski said.
"We've got a major structural problem here, where it's increasingly expensive for people to take jobs, even if they exist," he said. "They're getting pushed further and further out of the city, and they're travelling longer distances to get to work - and its a major brake on productivity."
Mr Pisarski believes taxation arrangements, including a 50 per cent capital gains tax exemption for property investors and allowances for negative gearing, must be reformed to stave off a worsening crisis of affordability and skills exodus in large cities. The government should focus on investing in public transport, rather than roads, to connect communities on the city fringe to jobs at the city centre, he said.
Mr Gunning says the problem can be tackled at a state level by removing property taxes, a step he believes would lower the price of housing.
Both experts want planning reform so more people will live in suburbs closer to the city centre.
"Land releases on the city fringe won't help; they just exacerbate the problem," Mr Pisarski said. "They need to do something to tackle density and it has to be in a way that accounts for families and creates communities."
More than 90 per cent of 18- to 29-year-olds who live in Sydney believe rising prices mean home ownership is no longer achievable for their generation.
Fairfax Media Management Pty Limited
Document AFNR000020150514eb5f0004k
Samantha Hutchinson
460 words
15 May 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.
Sydney's rising property values could trigger a social crisis of an entirely different order: labour.
The median house price in Australia's most expensive city is on track to surpass $1 million before the end of the year, according to the Real Estate Institute of NSW.
A $1 million median will put the city at risk of losing essential service workers, including teachers, nurses and firefighters, and women who cannot afford to buy homes in the city where they work, experts say.
Sydney's median now is $914,056, after rising 3.6 per cent in the first quarter of the year.
"If the current trend continues, by the end of the year we will see property prices hit the $1 million mark," REINSW chief executive Malcolm Gunning said.
"Given the average person in NSW had yearly earnings of $77,600 in the last quarter of 2014, even in a two-income family, who can afford a house in Sydney?"
The middle class has increasingly been pushed to the city fringes in past years as asset values and rents on properties close to the city rise, resulting in long commutes and a growing preference for regional centres where property is more affordable and jobs can be found.
The ultimate damage is wrought on productivity, National Shelter chief executive Adrian Pisarski said.
"We've got a major structural problem here, where it's increasingly expensive for people to take jobs, even if they exist," he said. "They're getting pushed further and further out of the city, and they're travelling longer distances to get to work - and its a major brake on productivity."
Mr Pisarski believes taxation arrangements, including a 50 per cent capital gains tax exemption for property investors and allowances for negative gearing, must be reformed to stave off a worsening crisis of affordability and skills exodus in large cities. The government should focus on investing in public transport, rather than roads, to connect communities on the city fringe to jobs at the city centre, he said.
Mr Gunning says the problem can be tackled at a state level by removing property taxes, a step he believes would lower the price of housing.
Both experts want planning reform so more people will live in suburbs closer to the city centre.
"Land releases on the city fringe won't help; they just exacerbate the problem," Mr Pisarski said. "They need to do something to tackle density and it has to be in a way that accounts for families and creates communities."
More than 90 per cent of 18- to 29-year-olds who live in Sydney believe rising prices mean home ownership is no longer achievable for their generation.
Fairfax Media Management Pty Limited
Document AFNR000020150514eb5f0004k