The vast majority of people in Australia aspire to own their own home with independent research showing that over 92% of renters want to be able to buy a property in the future.
They believe that owning a home is important in terms of achieving financial stability, particularly in retirement, according to the research from the Housing Industry Association (HIA).
But less than half of those who want to own a home think that they will achieve their dream of home ownership and the biggest barrier is saving up for the deposit needed for buying a first property.
They also believe that the Australian Government has a role to play in helping first time buyers onto the housing ladder, with 71% saying so.
According to HIA chief economist Tim Reardon, the importance of home ownership for financial security makes housing affordability a top three issue to Australians at the next general election after the cost of living, health and ageing and ahead of immigration and the environment. “
He believes it is a concern that 75% of Australians feel that it is more difficult to purchase a home now than 10 years ago. ‘With a Federal election imminent, it is important to recognise that 71% of people believe Governments have an important role in helping Australians achieve their dream,’ said Reardon.
‘The importance of home ownership to Australians couldn’t be clearer. Now more than ever, home ownership matters,’ he added.
The research is published as figures from the HIA suggest that the current downturn in the level of home building activity will be contained to the next two years, as long as migration policy is not tightened further.
The HIA quarterly economic and industry outlook report points out that in 2018 market confidence fell away as dwelling prices corrected, adversely impacting all segments of the market.
Reardon explained that investors and owner occupiers are delaying purchase decisions and foreign investment has also fallen dramatically for numerous reasons.
‘An additional and unanticipated factor that emerged in 2018 was the credit squeeze created as banks reduced the amount of money they are prepared to lend each customer. The impact of the credit squeeze will moderate over the first half of 2019, as the market adjusts to these new limits,’ he said.
‘The pipeline of building work has expanded over recent years and this backlog is now being reduced. If the leading indicators do not improve in the first half of 2019, then the pipeline of building work will be exhausted at a concerning rate,’ he pointed out.
‘Builders in markets with a significant volume of work in the pipeline, such as Melbourne, have not been affected by the downturn yet, but other markets that were already performing poorly, such as Perth, have seen their market fall to a new historic low point,’ he explained.
He believes that the building industry, which has driven activity in the rest of the economy for the past five years, is now reliant on the strength of the rest of the economy to delivery an orderly downturn.
‘The expectation that governments will not constrain net overseas migration is central to this outlook for a contained downturn. If the fall in overseas migration accelerates then interest rate cuts are likely to be necessary in order to mitigate the adverse impacts of this home building downturn on the wider economy,’ he concluded.
