Many Australians now see that owning a house is a distant reality. While becoming a homeowner is but a dream, a recent report from domain.com.au showed that there a few myths about the country's top housing market to be debunked.
a) Myth: Price issue would be resolved with greater supply. The current strategy in the region is to provide more houses to depress costs. Unfortunately, the recent history has shown that this isn't the case. Sydney actually has a lot of supply and the rate of supply is steadily increasing, yet prices continue to climb. This phenomenon is occurring in other housing markets, such as the United States, Spain and Ireland. As prices increases, more and more players enter the market, buyers seeking the bargains and investors seeking to recoup profits. These keep prices rising despite an oversupply. The next best step is to intervene to keep the prices affordable especially for low and moderate income brackets.
b) Myth: Property prices would remain low without foreigners in the housing market. While this is a common conclusion, the presence of foreigners (and their funds) essentially pushes the creation of new supply. This is most pronounced during low periods in the market, as international investors would lap up the existing supply. Now, keeping the prices affordable for all, foreign or local, is the key issue that needs to be addressed.
In another report, this time from businessspectator.com.au, housing in Sydney is very much affordable. The commentaries about the supposed existing housing affordability crisis in Sydney is in actuality, a reaction to being unable to find a home that is affordable to the individual in the area of their choice. There are homes available in Sydney. There is income available in the market. It's just buyers unable to find a home they want in the address they want within their budget. That's the myth.
