Australia

Demographia's Housing Affordability Survey makes simple assumptions: PIA

US greenfields lobby group Demographia has once again taken a simplistic approach to housing affordability in its Annual International Housing Affordability Survey this year, laying blame of issues to planning, according to the Planning Institute of Australia (PIA).

Houses in Bondi Beach
Above: Houses in Bondi Beach / by Alex Proimos.

In a statement last week, PIA CEO Kirsty Kelly said that while planning is undoubtedly a factor in addressing housing affordability, it is only one part of a complex puzzle.

"The causes of affordability problems are complex and diverse, with major driving factors impacting both demand and supply found both within the housing system and beyond," Ms Kelly said.

PIA highlights that places considered unaffordable are usually where most want to live, because of the strong alignment with liveability indicators — places typically well planned and amenity rich.

 "The housing affordability debate must go beyond the price point of a house to consider the lifestyle costs associated with living in a house, including the travel and costs associated with access to jobs and services," Ms Kelly said.

"A house on the sprawling suburban fringe of a city might be cheaper, but when you factor in the costs of travel to access work and other services the affordability answer is quite different," said Ms Kelly.

PIA is pleased that Cities Minister Greg Hunt has recently acknowledged the need for approaches that address the disconnection between housing and employment and the resulting impact on affordability, and looks forward to working with him to identify solutions.

"Demographia's suggestion that market forces will sort things out in a complex urban environment is naive as while a perfect market will correct itself, the property market is one of the least perfect markets there is," Ms Kelly said.

PIA's Housing Position Statement advocates for a more comprehensive approach to considering in housing affordability that includes national leadership, financial and tax incentives.

It reinforces the need for policy and regulatory reform to ensure a more comprehensive and holistic approach the housing affordability is delivered.

Photo: Houses in Bondi Beach / Alex Proimos / Licensed under Creative Commons BY-NC 2.0.

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