The data tells us that the ACT is one of the most affordable places to buy a house in Australia.
Subscribe now for unlimited access.
or signup to continue reading
Ron Bell isn't convinced. As chief executive of the Real Estate Institute ACT and an ex-developer with three decades of experience, he should know. Lately, the issue has become personal.
He and his wife are looking to downsize and are struggling to find a suitable home at an affordable price.
A focus on high-density developments has priced the couple out of the few detached houses up for sale.
"The problem for people like my wife and myself, there are very little three-bedroom townhouses on the market – in fact, builders aren't doing it," Mr Bell said.
"It is very frustrating but hopefully, it won't become more so. People are looking for property when they retire and it's simply not there."
CoreLogic's latest housing report lists Canberra as the nation's second-most-affordable place to buy. The figure was reached by dividing the median house price by the average weekly income.
The median dwelling price increased 14 per cent from $477,000 to $545,000 between 2011 and 2016, and incomes rose 6 per cent.
The same report shows house prices increased 49 per cent in Sydney and 18 per cent in Melbourne during five years, with incomes lagging similarly behind.
"By a simple measure it's pretty hard to beat Canberra for housing affordability," Australian National University Centre for Social Research and Methods Associate Professor Ben Phillips said.
"That might not be something other groups might say but that's the hard numbers on it. That's not to say that Canberra is affordable but it's more affordable than other regions."
Associate Professor Phillips was right – other groups did not say it. The heads of the Housing Industry Association, Real Estate Institute of the ACT, ACT Shelter and Property Council of Australia all agreed owning a home in the ACT was becoming out of reach for many people.
Canberra was one of the only jurisdictions in Australia to experience a deterioration of affordability, worsening 1.5 per cent during the past quarter due to an increase in dwelling prices in the latest Housing Industry Association Housing Affordability Index.
Mr Bell blamed slow land releases, arguing demand had "well and truly" outstripped supply.
"The number of people coming into the territory in the last few years has made it very difficult for the government to keep up with land supply," he said.
"It makes it extremely difficult for low-income earners and first home buyers to move into that market because it's been underrated and undersupplied and therefore the pricing has been too high for a lot of those people to get into – and probably too high for anybody, quite frankly."
An ACT government spokeswoman said the number of dwelling sites released during the past decade exceeded underlying demand by more than 30 per cent.
"Land supply is an important factor in affordability but other policy levers and tax settings are also central, which is why the ACT government has actively called for Commonwealth reforms to negative gearing and capital gains tax concessions," she said.
But HIA ACT-Southern NSW executive director Greg Weller said there was also a disconnect between what was being approved and what the consumer wanted, leading to an increase in the price of detached homes.
"The drivers of affordability are the cost of borrowing, income growth and the cost of housing," he said.
"Income growth in the ACT has been relatively stagnant and interest rates have been low, so really the thing that's been driving affordability problems in the ACT has been growth in house prices.
"That said, given that there has been very strong building in units, the high level of units in the ACT provide some really good opportunities for people who are looking to get into the housing market and perhaps moving straight into a detached home for the first property may not be the right thing for every home buyer."
There are units and apartments out there – in oversupply, according to Associate Professor Phillips – but not everyone wants to live in them.
Mr Bell said he could live in a unit but his wife could not. Mr Weller said cultural change was slow.
"We are seeing it shift, but nonetheless the great Australian dream is still well and truly alive," he said.
"The community is still demanding that. If it wasn't the case, we wouldn't be seeing the upward pressure on home prices we see now, which simply shows there is a demand for that and that demand is not being met."
