Australia Headed for Housing Crisis As Population Surges

John Symond calls on urgent action from Government

Wednesday March 31, 2010

Australian Federal and State Governments need to release more land for housing in capital cities and address the high costs associated with it as our population surges and the property market heats up, Aussie Home Loans executive chairman Mr John Symond said today.

“Governments across the country have been negligent in allowing our housing shortage to reach the levels it has,” Mr Symond said. “Recent figures from the Australian Bureau of Statistics show each capital city grew faster in 2008-2009 than they did on average over the last five years.”

“The major problem is the inaction of Governments to release land, and the cost of connecting utilities is far too high creating a huge burden on first homebuyers,” Mr Symond said.

“Quite often, connecting utilities to new houses in metropolitan cities can be well over $100,000 per house, and in turn this pushes the price of the new home up and contributes to the very high consumer debt in Australia.”

According to the ABS, Perth had the highest growth rate (3.2 per cent) closely followed by Darwin (3.1 per cent) while Melbourne recorded the largest increase (93,500 people). Brisbane reached the population milestone of two million.

The combined population of Australian capital cities increased by 310,200 people in the year to June 2009 and accounted for over two-thirds of Australia's population growth.

“Our capital cities are already struggling to house its citizens and if our population continues to grow, we will face a serious situation as housing prices continue to rise and will become out of reach of a huge percentage of people,” Mr Symond said.

Mr Symond said the Reserve Bank of Australia was gravely concerned over the current property bubble emerging in our capital cities, particularly Sydney and Melbourne, evidenced by Governor Glenn Stevens and his media push this week.

“For the Reserve Bank Governor to give an interview on national television to give the public an insight into the workings of the RBA and say he is worried about the property frenzy, is unprecedented,” he said. “No doubt this will have a bearing on higher interest rates.”

Mr Symond said the combination of rising property prices, continuously high rents and our growing population could spell disaster for future generations.

“I do fear young Australians will not be able to experience the joy of home ownership if we continue down the path we are on at the moment,” he said. “Governments need to act swiftly to ensure we have adequate and affordable housing for all Australians.”

As one of the country’s largest non-bank providers of financial services, Aussie has a loan book of over $35 billion. With the acquisition of Wizard, there are now over 150 retail stores and 850 brokers across the country ready to help customers get a better deal on their finances.

For more information or to request an interview with John Symond please call:

Brooke Stoddart
Senior Manager – Public Relations
Aussie
02 8297 0381 or 0438 677 588

Tim Allerton
City PR
(02) 9267 4511

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