Time to make property more affordable?

Applying for your first home loan is a big step, especially if you’ve spent years putting money aside as a deposit on your new property.

One of the biggest hurdles many people are facing at the moment is finding a property that’s within their budget – and it’s an issue policymakers are keen to address. There’s been no shortage of discussion on the issue over recent months, as greater insight is given into the national property market.

Among the biggest studies was the Foreign Investment Review Board (FIRB) Annual Report 2013-14, which showed the role that overseas investors are playing in the market. There had been some concerns that international parties were driving up property prices, but the report seemed to suggest this wasn’t the case.

FIRB revealed that the real estate sector received the highest amount of proposed investment over the course of the year, as foreign investors put their money into the construction industry. In fact, approvals increased from 12,025 in 2012-13 to 23,428 the following year.

Property Council of Australia Chief Executive Ken Morrison noted that overseas investment should be encouraged, as it’s opening up the market to anyone seeking first home buyer loans.

Mr Morrison continued: “Every newly constructed home that a foreign investor purchases enables up to four other homes to be built, so this boost is good news for affordability.

“The only way to improve housing affordability is to get more housing on the ground earlier, and foreign investment is making this happen.”

Also released in recent days was the outcome of the Senate Affordable Housing Report, which highlighted the need for affordability improvements. Committee members noted that private and public sector finance would be necessary to meet the shortfall of properties currently faced in Australia – and especially in the rental sector.