Australia’s housing market is showing decline due to unavailability of land, increasing interest rates and migration level, less workers, more grocery bills, high living costs, less saving capacity etc.

The affordability report by HIA-Commonwealth Bank, Australia, revealed that affordability dropped by 2.1% due to increasing house prices and high interest rates in September. Currently, the house buyers in Australia are spending almost 31.7% out of their total incomes for mortgage repayments, which is the highest value. And Melbournians are expending around 30.7% of their incomes on the mortgage repayments. Theage published this news.

Also, according to the figures revealed by the Reserve Bank, the people in Australia are giving high interest bills. Now, the interest rate that is being paid on mortgages is 9.5% of the total household disposable incomes. This also points to the fact that over $100,000 household income would be needed to get a loan for a moderately priced first house.

Some other factors that have led the housing market to decline are high level of people migrating in Australia, which showed many long-term arrivals lifting the demands, and the high rents. People from New Zealand are migrating as ‘guest’ workers, refugees, and some take general migration.

The decline in the affordability of the Australians, because of higher mortgages, is also affecting the housing market. This, again, has discouraged the Australians to take loans. Besides this, high credit cards debts, higher grocery bills, rise in the cost of living that is resulting into less saving capacity, as the expenditures are more than what they earn, are the reasons for the decline in the housing market. Even the cost of oil is high.

Also, the available land is not enough to compensate for the extra need for housing. Customers, financiers, and house builders are also unable to target the full capacity of the market, due to less workers and unavailability of enough resources. Straining the capacity further are shortages and also the rush to bring in number of workers temporarily that are elevating the rental costs as well as the demands. The rents are also pushed because of less housing facility available. This trend is taking the inflation high.

A Senior Research Analyst at RNCOS said, “The housing market in Australia is dropping every day, and is affecting the economy of the country. Therefore, the government has to take the matter seriously. The Australian government should decrease the interest rates. Well, the only positive shown by the plunging housing market has shown is the increasing level of migration in the country”.