Having a stable and regular income is no longer enough to enter the housing market in Sydney as prices continue to skyrocket, research from the University of Technology Sydney (UTS) and the University of New South Wales (UNSW) suggests.
Published in the journal Cities, the study examined the relationship between housing affordability and employment contracts in Australia.
The researchers found that based on the 2021 NSW weekly median income, no part-time employee earning $600 per week could afford to buy a home in Sydney even if all of their allotted money is for housing.
Full-time employees who earned $1,500 are also not expected to afford a home in Greater Sydney.
The researchers developed an affordability index based on the likely mortgage payment of a prospective house buyer according to current property market value, having a 20 percent deposit, the average house lending rate, and a loan period of 30 years.
“While we expected the issue of housing affordability to be severe for part-time employment, we found that full-time employees are also significantly affected,” said Professor Chyi Lin Lee, senior author of the study from the School of Built Environment at UNSW Arts, Design & Architecture.
“This highlights the widespread housing affordability crisis and the need for comprehensive policy solutions.”
Earlier this month, the Department of Infrastructure, Transport, Regional Development, and Local Government (DITRDCA) said that 73 local government and seven state housing projects will be funded by the Federal government under the Housing Support Program.
According to DITRDCD, this program is one of the measures for the Albanese Government to attain 1.2 million new homes within 5 years.
“The Housing Support Program is an important part of our Government’s $32 billion Homes for Australia plan which is building more homes across Australia,” said Prime Minister Anthony Albanese.
“It’s a critical part of our plan to work with states and territories to help them meet the ambitious national target to build 1.2 million well-located new homes.”
However, the study by UTS and UNSW suggested that annual incomes might need to be augmented with existing wealth or significant cash gifts from families or peers to help median-income earners purchase a home and afford the mortgages.
“The major consequence of median incomes not being sufficient to enter the housing market in Sydney is that households relying solely on their earnings will have limited chances of achieving homeownership,” Mr. Lee said.
“So, it’s clear the Australian dream of owning a home is becoming increasingly harder to attain.”
In a white paper published by the Australian Landlords Association (ALA), the organisation suggested that the Federal government should allow practical solutions to enhance housing affordability in the country.
These solutions include allowing different types of rental agreements, replacing rental bonds with national rental insurance, reestablishing the property market as a viable path to home ownership, and placing a cap on property tax hikes.
