Cost of rising house prices

While 180,000 new homes will be built nationally by June next year – about 30,000 more than the recent average – this is still not enough to meet demand.

Meanwhile, house prices continue to rise with Canberra property values growing by 2.5 per cent over the winter quarter and the median price now standing at $510,500 – surpassed only by Sydney, Melbourne and Perth.

The International Monetary Fund recently ranked Australia as the third least affordable place in the world to buy a house – behind only Belgium and Canada.

Escalating house prices aren’t good for anyone – for individual families, for the community or for a government trying to balance the budget.

Without affordable housing Canberra cannot attract skilled workers, new families or young people. This directly affects our city’s growth and economic viability.

We need to think more creatively about how to improve affordability such as reinventing some of our vacant commercial offices as residential space. Another is to open up greenfields sites to the private sector to develop, adding competition and choice into the market.

In 2007, the Property Council sent plastic bananas to state and federal MPs with a cheat sheet on housing affordability. Evoking Cyclone Larry, which devastated fruit farms in northern Queensland, it reminded politicians of the basics of “banana-nomics”: when there is a shortage, the price goes up.

Catherine Carter is ACT Executive Director at the Property Council of Australia

This piece was first published in Canberra City News