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REIQ Journal : July 2008
16 FEATURE Dan Molloy, Managing Director, REIQ The most recent Deposit Power / REIA Housing Affordability Report shows deterioration in both rental and home loan affordability across Australia and, for the first time, Queensland has replaced New South Wales as the least affordable state in the country for new home loans. According to the report, Queenslanders require 40.5 per cent of median weekly family income to service the average new loan, which has resulted in a 4.3 per cent drop in affordability in the last quarter and a 11.2 per cent drop over the last year. The pressure on rental affordability continues, with the proportion of income required for rent increasing from 25.1 per cent to 26.5 per cent over the quarter. This, of course, is impacting on the ability of would-be first home buyers to break into Queensland’s property market as saving for a deposit becomes increasingly difficult. Following the State Budget announcement, Premier Anna Bligh revealed the government would fasttrack planning for development of 17 greenfield sites in South East Queensland to help tackle the issue of land supply. A recent review of more than 40,000 hectares of undeveloped land within the Urban Footprint has prompted the government to remove any regulatory hurdles slowing development on a number of key sites. With recent research from CB Richard Ellis predicting an eightmonth shortfall in residential land by the end of 2008, the announcement seems just in time. Before the end of the year, the development process will commence on 12 sites, including: Maroochydore and Meridian Plains on the Sunshine Coast; Market Drive and North Lakes in Moreton Bay; REIQ Journal July 2008 Source: Deposit Power/REIA Housing Affordability Report, March quarter 2008 Upper Kedron and Rochedale in Brisbane; Coomera and Helensvale on the Gold Coast; Springfield and Redbank Plains in Ipswich; and Kinross Road and south-east Thornlands in Redlands. Land at an additional five sites will be prepared for development within the next year, including: Palm View and Caloundra South on the Sunshine Coast; Flagstone in Logan; Oxley Wedge in Brisbane; and Ripley Valley in Ipswich. Expansion to the Urban Footprint has also been proposed, with a new draft plan expected for release in December this year. The importance of establishing appropriate infrastructure and transport links to support such development will need to remain paramount; as will guidelines to ensure future expansion and development is sustainable. Queensland Treasurer Andrew Fraser has also proposed introducing a means-test for the first home owners grant to abolish the $7,000 subsidy for homes above $1 million. The grant is a Commonwealth initiative administered by the Queensland Government and discussions are currently taking place regarding the states’ responsibility for the funds under the inter-government agreement. There is no quick-fix solution to address housing affordability. While these reforms are all steps in the right direction, the challenge now is for government – at the federal, state and local level – to follow through on the announced initiatives and take action. With recent figures showing Queensland’s population is set to increase by around 1.5 million people by 2026, the current imbalance between supply and demand needs to remain a key focus. For more information on the Queensland State Budget, visit www.osr.qld.gov.au/budget08/ index.shtml