Adequate housing is a basic human need. As well as providing shelter and security, housing can provide a sense of identity.
Housing performs both a consumption and an investment function. It is the largest single item of expenditure for the average household. On average, a fifth of Queensland household expenditure goes towards housing costs (ABS 2017f). Queensland home owners with a mortgage, and renters, spend higher proportions of their income on housing than other Australian households (ABS 2017e).
For many people, owning a home is a way to accumulate wealth—residential land and dwellings account for more than half of total household assets in Australia (PC 2015, p. 3). However, there are concerns that access to home ownership is making the distribution of wealth—particularly between generations—less equal and there is a growing divide in terms of access to housing market opportunity (CEDA 2017, pp. 80–85). In a recent national poll, Australians ranked housing affordability as their second most important economic issue (Essential Research 2017).
If housing of adequate quality is unavailable or unaffordable, quality of life can be adversely impacted, with consequences ranging from poor health outcomes to increased crime (Friedman 2010). The Australian Productivity Commission (2017), in its review of the productivity challenges facing Australia, identified the efficiency of cities, including access to housing, as one of the five most important productivity and welfare policy issues.
Poorly matched housing preferences and supply can impact the spatial structure and functioning of cities— including transport costs, labour markets and access to services and amenities. Where the housing stock is poorly utilised, it can reduce productivity by wasting scarce resources. And because housing is the largest source of both household wealth and debt (ABS 2017h), the housing market is an important factor in economic stability.
Housing policy is a complex area, in which all three levels of government play a role. Governments are under pressure to 'fix' issues, as demonstrated by the provision of grants to first home buyers and housing packages. Yet progress in resolving the issues is slow.
This paper focuses on the housing market in Queensland. It examines:
• trends in house prices and whether housing has become less affordable in Queensland generally or in parts of the state
• whether home ownership is falling
• whether the types of housing are changing and whether these changes match people’s preferences
• influences of housing availability and affordability
• some principles for good policy
Housing markets are diverse, comprising many different interconnected segments based on location, quality, dwelling and tenure—from homelessness through to home ownership (AHURI 2017). This paper focuses on home ownership and the private rental market. While problems with the availability and affordability of housing in private rental and ownership markets flow through to social housing, crisis accommodation and homelessness, this is outside of the scope of this paper.