16 May 2022

Brisbane Council urged to ease housing stress with Olympic funds

Interest rate rises will add financial pressure on home owners and landlords at a time when Queensland’s tight rental market has forced people into house sharing, temporary accommodation – or the streets.

Amid a broader debate over housing policies, Brisbane Council’s opposition party has called for millions in Olympic-related money to be reallocated to provide more housing options in the fast-growing city.

Queensland continues to attract a large number of interstate migrants, adding to record-low rental vacancy rates, with Greater Brisbane’s vacancy rate just 0.7 per cent in February.

After the Reserve Bank approved the first of several interest rate rises on Tuesday, there were concerns that some struggling mortgage-holders could be forced to sell, while landlords could raise rents even higher.

The 0.25 per cent rate rise would add $65 to monthly repayments on a $500,000 mortgage, if passed on in full by banks.

Brisbane’s median property price was $830,000 in March, while recent figures from the Australian Bureau of Statistics show the average loan size in Queensland is $514,000.

Antonia Mercorella from the Real Estate Institute of Queensland said the state’s market could weather the RBA move.

“This is also where our relative affordability is an advantage, as our average home loan rate is much lower than in capital cities like Sydney and Melbourne, so the impact will be felt less here,” she said.

“We remain confident in the resilience of the Queensland market because the need and demand for housing is irrespective [of interest costs], and an interest rate rise simply causes people to rethink what they are prepared to spend and how big a loan they are prepared to enter into.”

Brisbane City Council Opposition Leader Jared Cassidy said the housing affordability crisis was the “worst we’ve ever seen”.

The Labor councillor questioned the LNP administration’s priorities, calling on the council to reallocate millions of dollars earmarked for an Olympic site, to respond to the crisis.

Council originally indicated it would buy the Visy Recycling Centre on Montague Road, South Brisbane, but the Queensland government last week announced it would pay $165 million to buy the site for the Olympic Games International Broadcasting Centre.

Cassidy said the money was “sitting in the council budget” and was now unallocated.

“This just isn’t acceptable for the Brisbane of 2022,” he said.

“This is an extraordinary housing crisis and we think governments of all levels, council, state and the federal government, should be doing everything they can and finding new and innovative ways to address these concerns.”

But the Office of the Lord Mayor said the money would be allocated to the Woolloongabba Metro station, designed to link up with Cross River Rail to provide a vital connection for the Olympics.

Earlier this year, the council called on the state government to ensure 30 per cent of the apartments to be built at Cross River Rail’s Woolloongabba precinct would be reserved for social and affordable housing.

Almost $3 million has been allocated in the council’s recent budget for support programs, BCC’s Vicki Howard said.

Data released in 2021 suggested Toowoomba, Brisbane’s northern outskirts, and Ipswich had the most home owners under mortgage stress, while the booming housing market in other areas enabled mortgage-holders to build up equity in their properties – if they could afford the repayments.

Construction costs on new homes and large rental increases were two of the main drivers pushing up the cost of living for Australian households, University of Queensland business professor Shaun Bond said.

“In the case of surging rental prices, there are no easy answers for those families struggling to find accommodation,” Bond said.

Queensland Council of Social Service chief Aimee McVeigh last week warned that the situation was so dire, “women and children are returning to domestic violence situations and living in cars with newborns because there is nowhere else to go”.

Bond said some price pressures were expected to moderate in coming months.

He pointed to slowing house price growth in Sydney and Melbourne, as affordability constraints limited buying activity.

“Population growth pressures may also ease as rental shortages limit the appeal of moving and a strong job market keeps people in the major cities,” he said.

Sustainable Population Australia’s Queensland branch president, Edward Smith, said almost all comment by politicians focused on the supply of housing, and not on demand.

“Demand for housing is strongly impacted by policies set by governments, particularly migration and taxation,” he said.

“The only realistic long-term solution to housing affordability involves allowing house prices to fall.

“Low immigration is a necessary condition for this, along with policies that moderate speculative investment in property.”

SOURCE: https://www.brisbanetimes.com.au/national/queensland/brisbane-council-urged-to-ease-housing-stress-with-olympic-funds-20220503-p5ai7y.html

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