Report finds Victoria’s housing affordability at its worst level

ABC NEWS (Australia)

New analysis has found housing affordability in Victoria has dropped to its worst level on record. Median-income households are being increasingly priced out of the market with Victoria now among the least affordable states to buy.

Transcript

00:00In Ardea in Melbourne's west, this three bedroom fixer-upper is going to auction and the competition

00:08is fierce.

00:09Come on, my heart's breaking for you.

00:12Some bidders are desperate to find a home.

00:1457.

00:15It's been a slow process.

00:17It's tough out there.

00:18The market has been hot for a while, so there's been lots of people going to auctions and

00:22we're getting our bid.

00:23It's getting to me, you know, and I start to feel like maybe it will not happen, you

00:27know.

00:28A combination of high interest rates and increasing house prices have pushed Victoria's housing

00:32affordability to its lowest in 30 years.

00:36A new report from PropTrack has found a median income household could afford just 12% of

00:41homes sold over the last financial year.

00:44It puts Victoria below the national average and makes it the third least affordable state

00:49after New South Wales and Tasmania.

00:51If you're a Victorian household in the bottom 20% of incomes, you could effectively afford

00:56no homes over the past year.

00:58It also found a household earning an average income would need to spend 35% of it on mortgage

01:04repayments to afford a median priced home.

01:07It shows how much of a disconnect there is at the moment between incomes and home prices.

01:12The peak body for community housing says low income earners are also being priced out of

01:17the rental market.

01:18The group says that a lot of so-called affordable rental housing isn't actually affordable and

01:23there needs to be a set definition of what it means.

01:26And it would be a set rent based on the location of the property and the number of bedrooms

01:31that would be guaranteed to be affordable because rents would be set based on household

01:35incomes.

01:36What's really important is that we stay focused on having more housing stock available in

01:42the market because that we know is the best way to bring down the cost of both renting

01:48and purchasing a home.

01:50But for these unsuccessful bidders, the search for a new home continues.

01:56For more UN videos visit www.un.org

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