Presentation to Victorian Ministerial Forum Ian Winter Executive Director, AHURI
Purpose Evidence foundation for today s discussion Sharpen definition of the housing problem(s) Identify solutions fit for addressing those problems
Structure Backdrop of long-run changes in the structure and dynamics of Australia s housing system Focus in on Victoria with a view to clarifying the differing nature of the housing problems we face Overview the policy interventions that are fit-forpurpose, given the nature of the problem(s)
Part one Long-run changes in the Australian housing system
Housing system snapshot No stable housing ~105k people Renters 30% Owners 67% Social housing 5% Private market 25% Mortgage holders 35% Outright owners 32% Public housing ~338k dwellings Community housing ~82k dwellings Note: 934 470 unoccupied private dwellings in 2011 Percent of 7.76m occupied dwellings from ABS 2011 Census and 2013 admin data (includes Indigenous community housing and state owned and managed Indigenous housing)
Fewer households in the most secure tenures Public housing and outright ownership Source: ABS 4130
and rates of ownership and purchase are falling for younger cohorts 85 80 Rate of home ownership 75 70 65 60 55 50 25-34 35-44 45-54 55-64 45 40 1981 1991 2001 2011 Source: Burke (2014) Table 4 - ABS Census, unit record files, 1981, 1991, 2001, 2011
Exit from and churn through home ownership Source: Wood, G, Smith S, Ong R, and Cigdem M. (2013) - calculations from the 2001 10 HILDA Survey, 2001 08 BHPS and UKHLS wave 2
Long term and short term rental increasing (one to 4 years) (5 to 10 years) (over 10 years) Source: 1994 ABS Rental Tenants Survey (Wulff 1997; Wulff & Maher 1998); ABS SIH 2007 08 (original), from Stone et al (2013).
Lack of affordable housing for low income renters 1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 300,000 Lower income private renter households Affordable dwellings for households Lower income households in affordable dwellings 200,000 100,000 0 Lowest 20 per cent Second lowest 20 per cent Source: ABS Census of Population and Housing 2011, data Lowest two quintiles (From Hulse et al. 2014)
Shortages have grown over time Source: Hulse et al. 2015, customised ABS 1996, 2006 and 2011 ABS Census of Population and Housing data
Social housing stock numbers declining Source: ROGS 2014, Table 17A.3; ABS 3101
Higher homelessness linked to crowding not rough sleeping 120,000 100,000 Number of Persons 80,000 60,000 40,000 Persons living in 'severely' crowded dwellings Persons in other temporary lodging Persons staying in boarding houses Persons staying temporariliy with other households Persons in supported accommodation for the homeless Persons who are in improvised dwellings, tents or sleeping out 20,000 0 2001 2006 2011 Source: ABS 2049, Census of Population and Housing, Estimating homelessness 2011
Conclusion Long run structural change in the Australian Housing system Home ownership falling entries and fall outs Private rental growing long term, supply shortages and high affordability stress Social housing supply falling and three quarters of allocations to those in highest need, changed tenancy profile Long-term structural trends are negative and these are the backdrop for housing policy reform
Part two Victoria: defining the problem
General supply and affordability 450 400 Population growth, lot release, dwelling completions and house price growth - Victoria (Sept 1997 =100) 350 300 250 200 150 100 Dwelling completions Index Established House price index (Melbourne) Population Growth Index Lot release (Melbourne) 7 month moving average 50 0 Sep-1997 May-1998 Jan-1999 Sep-1999 May-2000 Jan-2001 Sep-2001 May-2002 Jan-2003 Sep-2003 May-2004 Jan-2005 Sep-2005 May-2006 Jan-2007 Sep-2007 May-2008 Jan-2009 Sep-2009 May-2010 Sources: Population change: Cat. 3101.0 - Australian Demographic Statistics, Sep 2014 Dwelling completions: Cat. 8752.0 - Building Activity, Australia, Sep 2013 Lot release: Residential Land Bulletin data Department of Transport, Planning and Local Infrastructure House price index: Cat. 6416.0 - Residential Property Price Indexes: Eight Capital Cities, Dec 2014 Jan-2011 Sep-2011 May-2012 Jan-2013 Sep-2013 May-2014
Additions to demand and supply Average annualised per cent changes (Victoria) Rate of net additions to demand Population Rate of additions to supply Lot release Dwelling completions Rate of price increase Established house prices (Melbourne) 5 years to March 2013 0.0 5.5 5.5 3.1 16 years to March 2013 6.7 4.4 4.0 8.0
Mortgage affordability
Shortages of affordable and available rental stock for low income households Victoria 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 Lower income private renter households Affordable dwellings for households Lower income households in affordable dwellings 0 Lowest 20 per cent Second lowest 20 per cent Source: 2011 Australian Census of Population and Housing data
Housing affordability stress rising in Melbourne 100 90 80 70 60 50 40 30 20 10 0 Percent of low income renter households paying unaffordable rents 1996 2006 2011 Q1 Melbourne Q2 Melbourne Q1 Non-Metro Victoria Q2 Non-metro Victoria Source: Hulse et al (2015) Tables 18, 19; customised data 1996, 2006 and 2011 Australian Census of Population and Housing data
State shares of homelessness, CRA recipients, and affordable housing compared to population 40.0% New South Wales 40.0% Victoria 35.0% 35.0% 30.0% 30.0% Population National share 25.0% 20.0% 15.0% National Share 25.0% 20.0% 15.0% Homeless population Affordable housing stock Income units on private rental assistance 10.0% 10.0% 5.0% 5.0% 0.0% 0.0%
Victorian public housing supply static but growth in community sector 90000 80000 70000 Average annualised rate of growth 1998 to 2011: Social Housing = 0.7 per cent/yr Population = 1.4 per cent/yr 60000 Units of housing 50000 40000 30000 Public Housing -Victoria Mainstream Community Housing All (mainstream) Social Housing 20000 10000 0 Source: Productivity Commission Report on Government Services Housing Attachments Table 17A.3 (Latest data to 30 June 2014)
Public housing waiting list for early housing has increased 60,000 50,000 40,000 30,000 20,000 10,000 Total waiting list (including transfers) Total waiting list (excluding transfers) Early housing waiting list (incl transfers) Early housing waiting list (excl transfers) - Jan-98 Jan-01 Jan-04 Jan-07 Jan-10 Jan-13 Source: Department of Human Services (DHS).
Conclusion Key housing problem in Victoria is lack of supply of dedicated affordable stock public, community, NRAS, shared equity. Increases in general land and housing supply necessary but not sufficient to address the key problem. Targeted interventions to stimulate new supply of dedicated affordable housing are required.
Policy interventions for new supply of dedicated affordable housing a) Inclusionary zoning b) Tax credits (NRAS) c) Equity sharing (retain subsidy) d) Support social purpose entities (real estate agencies, developers, housing associations, financiers) e) Social housing reform to drive financial viability f) Government borrowing: to build to lend
References Australian Bureau of Statistics (ABS) Census of Population and Housing (1981, 1991, 2001, 2011), including Estimating Homelessness 2011 Cat. 4130.0 Housing Occupancy and Costs 2011-12 Cat. 8752.0 Building Activity, Australia, Sep 2013 Cat. 3101.0 Australian Demographic Statistics, Sep 2014 Cat. 6416.0 Residential Property Price Indexes: Eight Capital Cities, Dec 2014 (House price index) Cat 4102.0 Australian Social Trends, Data Cube Housing Burke, T, Stone W, and Ralston, L. (2014) Generational change in home purchase opportunity in Australia AHURI Final Report No. 232, November Department of Human Services (DHS) Waiting List data Department of Transport, Planning and Local Infrastructure Residential Land Bulletin (Residential lot release) http://www.dtpli.vic.gov.au/data-andresearch/population/metropolitan/residential-land-bulletin
References (continued) Fox, R. and Findlay R. (2012) Dwelling Prices and Household Income in Reserve Bank Bulletin, December Quarter, Reserve Bank of Australia Hulse, K, Reynolds, M, Stone, W., and Yates J, (2015) Supply shortages and affordability outcomes in the private rental sector: short and longer term trends AHURI Final Report No. 241, June Productivity Commission (1996-2014) Report on Government Services Housing Chapter http://www.pc.gov.au/research/recurring/report-ongovernment-services/2015/housing-and-homelessness/housing Real Estate Institute of Victoria Rental Vacancy Rates http://reiv.com.au/property-research/rental-data/vacancy-rates Stone, W, Burke, T, Hulse K, and Ralston, L. (2013) Long-term private rental in a changing Australian private rental sector AHURI Final Report No. 209, July Wood, G, Smith S, Ong R, and Cigdem, M. (2013) The edges of home ownership AHURI Final Report No. 216, October.
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