Home Affordability

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Indigenous Business Australia (IBA) stressed the high number of Indigenous households in social housing and the importance of continuous work with governments in order to enable Aboriginal and Torres Strait Islander people to move into house ownership.
In their submission to the House of Representatives Standing Committee on Economics Inquiry into Home Ownership in Australia, IBA concluded that providing better conditions for home ownership for the Indigenous community is positive for the government as decreases the social help costs.
"For Aboriginal people at the margins of home affordability, having access to the First Home Owner Grant (FHOG) and stamp duty concessions has made the difference between being trapped as renters versus having home ownership. 
"The decisions by jurisdictions since 2011 to change their FHOG and stamp duty concession schemes, especially by reducing or abolishing the grant for the purchase of existing homes, has had a significant adverse impact on the ability of Indigenous Australians to obtain finance from commercial lenders and/or IBA. 
"IBA has observed that even in its traditional outer metropolitan and regional markets, our typical low to middle income customers are increasingly being squeezed out of the home buyer’s market. 
"In order that the gap in Indigenous home ownership does not increase it is critical that governments seek to augment existing market gap measures, such as the national Indigenous Home Ownership Program (IHOP) and state and territory government targeted programs. 
"The Indigenous Home Ownership Program (IHOP) provides Aboriginal and Torres Strait Islander people, who do not qualify for bank finance, with an affordable home loan. IHOP is targeted at first home buyers. 
"All jurisdictions should target application of the First Home Owners Grants and stamp duty relief to low to medium income Indigenous Australians regardless of whether they are purchasing an existing or new home. This will facilitate more Indigenous Australians being able to access home loans from mainstream financial institutions, in addition to those who may qualify for IBA assistance. 
"IBA recommends close collaboration between state and territory government programs and loan providers, including IBA, to strengthen the pathway between social housing rental and home ownership, building on the many initiatives already in place across jurisdictions. 
"The sale prices for government funded new houses and existing social housing stock (inclusive of land) offered for private sale in remote discrete Indigenous communities, should be set at realistic levels, so that there is reasonable security over a loan and there is a real chance of houses being bought and sold, enabling a housing market to evolve. 
The submission goal was to expose how barriers to achieving home ownership are greater or the Aboriginal and Torres Strait Islander segment. 
"In the 2011 census there were 209,000 Indigenous households, with 135,000 households not in home ownership. The statistics show that 65,000 new Indigenous households would need to move into home ownership to equal the wider Australian home ownership rate. 
"At the same time the Indigenous population is growing at a faster rate than the non-Indigenous population; expected to increase by 60 per cent from 2011 to 2031. The population is also relatively youthful, with 55.8 per cent less than 25 years of age compared to 31.9 per cent in the non-Indigenous population.
"The minimum annual income required to afford the median Australia house price is around $100,000 and much greater incomes would be required in many capital city markets.
"The average household annual income of successful applicants for IBA home loans in 2013- 14 was $75,000. The ability of IBA’s customers to afford a loan at these income levels is due to the extra concessional and other support provided by IBA and the purchasing of houses in more affordable markets (outer metropolitan and regional). 
"It is useful to categorise the affordability and broader challenges for Indigenous home ownership by geographical characteristics, such as remoteness, as this demonstrates the different strategies that are required to address the overall gap in Indigenous home ownership. 
"The table below shows the distribution of the Aboriginal and Torres Strait Islander population by remoteness classification, compared with the non-Indigenous population.
"Inner regional areas include the fringes around the major cities and larger regional towns/cities close to the capital cities or in the corridor between Melbourne and Sydney. 
"House prices are more moderate and in these areas there is also good access to employment opportunities. This is reflected in the high concentration of IBA home loans in inner regional areas (39% of the portfolio and 45 per cent of all new IBA loans). 
"Increasing Indigenous home ownership contributes to the broader picture of addressing Indigenous disadvantage. IBA’s own research, and research undertaken in the wider Australian community, have demonstrated that the broader economic and social benefits of owning a home are often as important as the financial benefits to the home owners.
"IBA’s research has found that owning a home and the responsibilities that this brings create: 
 A strong incentive for long term sustainable employment; 
 Higher wage growth for the main job-holder; and 
 Children of Indigenous home owners being more likely to have a job themselves and to aspire to own their own home.
"Of the 58 customers surveyed as part of the research (mainly in rural locations in Northern Australia), the household income of home owners increased on average by more than 50 per cent over the average period of six years since they had purchased their home. 
The survey revealed that 26 per cent of home owners intended to invest in other property, 9 per cent in starting a business and 9 per cent already derived income from their home (usually by basing a small business there). 
"The participation in Indigenous home ownership has positive long term cost benefits for government. The more economically independent Indigenous Australians can become, the less financial and other supports are required from government. For example, the cost savings from home ownership versus public housing costs have been estimated to be in the order of $167 million to $669 million per 100 households over a 20-year period.
"For Aboriginal people at the margins of home loan affordability, having access to FHOG and stamp duty concessions would make the difference between being trapped as renters of social housing versus having home ownership. Without this support fewer Indigenous Australians will be able to be assisted by IBA or other financiers."
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jchancellor-FAypfDUnLy

Home ownership barriers greater for Aboriginals, Torres Strait Islanders

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With each property development we manage, we'll fine tune the process so that on the next one, we'll do something a little differently to improve the results. 
After completing over 80 developments, our process has become pretty refined. But there is always something we can improve on. 
Sometimes they are just small tweaks that can make a massive difference. This particular example I'll share with you shaved literally a month off the planning process.
At Property Bloom we work across a number of different councils and each council has their own way of looking at and processing a Development Application (DA). It can be easy to make assumptions based on past experience. 
So when we started working in a new location that fell under a council we'd not yet worked with, we assumed they'd review our plans in the same fashion as the other councils. The first few DAs (all assigned to different town planners) were processed within about 7-8 weeks on average. This is a lot longer than we liked but still not as bad as another council's processing times. It fell somewhere in the middle of our best and worst processing times. 
The time your DA is in council is dead time, there is not too much you can do whilst you wait for the consent in case changes need to be made. We tend to use this period to choose material and colours.
Even after working with some councils for ten years, it will come down to the individual town planner who is assessing your DA and what they like to see marked on your plans. If they request 'more Information' then your DA is put on hold until they receive a response.  
This particular DA was assigned to a planner we'd not yet worked with at this council. We received a letter requesting more information on off street parking locations. The plans detailed a single garage for each villa. The requirements are to provide two parking spaces. Obviously one is in the garage - but here's where our assumption kicked in -  we thought the planner could 'see' that the second space was on the driveway as a stacked or tandem parking space.  
We quickly marked this on the plan and immediately sent it to the planner, and within three days we had the DA Consent on our desk. This set a record of processing time with this council - four weeks, down from eight weeks. 
It goes without saying that this was added to our list of what to include on the plans and we made a mental note never to assume. We are now a month ahead of schedule and our client is happy to save time and holding costs.
Jo Chivers is chief executive officer of property development project managers <a href="https://www.propertybloom.com.au/about" target="_blank">Property Bloom</a>.
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jochivers-wq5Bp59R5a

Drop assumptions and save time on your planning process: Jo Chivers

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GUEST OBSERVATION
Jeannie loves her apartment. It has a separate bedroom, a small bathroom, and an open-plan kitchen, lounge and dining area. It’s compact, but sliding doors open onto a generous balcony to create a larger living space. Jeannie often takes her meals on the balcony, where she can sit surrounded by pot plants and enjoy a view across houses with leafy backyards.
Jeannie’s three-year-old apartment is one of 57 single-bedroom units in Caggara House, a five-storey affordable housing development. It’s in a quiet street in Brisbane’s Mount Gravatt, within easy reach of shops, a medical centre, cafes and public transport.
Jeannie has spent much of her life in public housing on Brisbane’s south side. She brought up her three children in a three-bedroom commission home in nearby Holland Park.
After they had all flown the nest she downsized to a two-bedroom townhouse in Annerley. “It was more central,” she says, “just five to ten minutes from the city, which was good when I was working on call as a casual.”
Eventually, though, getting up the stairs became a problem, and Jeannie felt a bit unsafe living at ground level. At Caggara House there is a security entrance, a lift to her third-floor apartment, and wide passageways and doorways, so it is both safe and easy to navigate for someone with limited mobility.
Caggara is split into two buildings with a landscaped garden in between to give the complex a “green lung”. There is a shared barbecue area, a communal laundry, and a common room for parties, meetings and exercise classes. The development has won prizes for an energy-efficient design that provides for both privacy and social interaction.
Yet the real innovation is in the concept — it provided well-located, high-quality housing for low-income residents aged 55 and over, while freeing up resources to add to Brisbane’s overall stock of affordable housing. This might sound like a magic pudding, too good to be true, but Caggara’s residents previously lived alone in state-owned houses that were too big for their needs. Those houses were worth about A$500,000 each. It cost a little more than half that much to build each of the units in Mount Gravatt.
In this way, an investment of A$15 million in Caggara freed up A$25 million worth of assets that could be put to better use, either by accommodating families on the waiting list for social housing or by being sold to raise capital for new buildings.
<iframe src="https://www.youtube.com/embed/zpArAtKjkmc?wmode=transparent&amp;start=0" frameborder="0" width="440" height="260"></iframe>
Caggara House was created for former public housing tenants over the age of 55.
Community housing pioneers around the country
Caggara House is an initiative of the not-for-profit Brisbane Housing Company. It’s a provider of what is often called community housing, to distinguish it from the public housing supplied by state authorities (even though they serve a common client base of low-income tenants). Since it was set up in 2002, BHC has built 1,300 affordable rental dwellings and earned the same AA- credit rating as the Commonwealth Bank.
Housing First (previously the Port Phillip Housing Association) is another innovative community-housing provider. It has 1,200 dwellings scattered around Melbourne. And, like BHC, it forms strategic partnerships with private developers, other community organisations, and all tiers of government to build energy-efficient homes with low running costs.
In Sydney, affordable housing provider BlueCHP has a portfolio of 1,600 properties. In November 2017 it opened Macarthur Gardens, a mix of apartments clustered in three towers close to Macarthur Railway Station, Macarthur Square Shopping Centre, and Western Sydney University. BlueCHP manages 56 of the dwellings as below-market rentals for low-income households and is selling the other 45 to help finance the project.
Macarthur Gardens is the largest residential complex in Australia built from cross-laminated timber. BlueCHP was the first developer in New South Wales to use this cost-effective, environmentally friendly technology.
In theory, state housing authorities could innovate like the Brisbane Housing Company, Housing First and BlueCHP. In practice, this rarely happens. Governments tend to be overly cautious in a sector that is crying out for flexibility. David Cant, who was chief executive of BHC for its first 15 years, says: "Not-for-profits can take risks. They can work quicker and smarter."
Community housing providers also “know their residents and know their geography”, Cant adds.
Australia has a pressing need for more social and affordable housing. More than half of all low-income tenants in the private market spend at least 30% of their disposable income on rent (and often much more than that). This can lead them to skimp on essentials like food, heating, transport, health care and schoolbooks. In the long term this sort of rental stress can damage physical and mental health, stunt educational attainment, and limit opportunity.
Australia can learn from UK housing providers
Cant thinks the best way to reduce rental stress is to build up the community housing sector, even though it currently provides less than 1% of all Australian dwellings. He is confident this can be done, based on 25 years working in Britain.
Before the Thatcher government sold off council houses in the 1980s, local government was the largest and most established provider of low-cost rental dwellings in Britain. Today, housing associations are more significant: 170 individual housing associations own 2.49 million homes – more than 10% of all housing in Britain. Local government now accounts for just 7%.
Oona Goldsworthy, chief executive of the Bristol-based not-for-profit housing association United Communities, says the sector matured relatively quickly. On a visit to Australia to she told me: "Housing associations in the United Kingdom grew out of an ideological and political push that the state is not necessarily the best provider of housing."
The view was that smaller organisations that were closer to the community could do a better job. Goldsworthy says British housing associations were able to borrow proactively, capturing a relatively small amount of public subsidy and matching it with lending from other sources. That’s exactly the sort of agility that gives community housing an edge over public-sector providers in Australia.
In the 2017 federal budget, the then treasurer, Scott Morrison, announced two measures designed to enable not-for-profit associations to build more housing: the National Housing Finance and Investment Corporation and an affordable housing bond aggregator. Together, they are designed to make it easier and cheaper for housing providers to borrow money by acting as a bridge between community-housing providers and superannuation funds.
While community organisations can and do borrow from banks, each loan must be separately negotiated. Super funds won’t deal one on one with individual providers in this way, so the NHFIC aims to offer them a standardised, rated investment product.
Since it has the backing of both Labor and the Greens, the NHFIC should survive any change of government. Yet the most important tool for repairing housing in Australia is still missing — a substantial amount of government money.
Cant, who was recently appointed to the NHFIC board, says poor people are generally reliable rent-payers because they know housing underpins the rest of their lives. Offered a deal along the lines of “be a good neighbour, pay your rent and you can stay here as long as you like”, they will grab it with both hands and enjoy a sense of pride and ownership that is indistinguishable from an owner-occupied home. Yet the rent they can afford to pay is not enough to cover the cost of building and maintaining community housing.
Cant says: "If you want to house people on lower incomes then you have to find a bit of a subsidy."
The holy grail of superannuation funds investing in affordable housing will not be achieved unless government tops up the rents paid by low-income households to generate an acceptable rate of return.
Piers Williamson is the chief executive of the Housing Finance Corporation — Britain’s equivalent to NHFIC — and has been advising the Australian government on setting up the NHFIC. He told the tenth National Housing Conference in Sydney that Britain’s affordable housing model was underpinned by £45 billion (A$75 billion) in grant money. “Grants are one of the things missing over here,” he said. “Subsidised housing requires a subsidy.”
Australia badly needs more rental accommodation that does not leave low-income tenants living in stress. The only proven way to increase the supply of social and affordable dwellings is to increase public investment in the sector — in other words, to spend more taxpayers’ dollars.
Why should wealthier Australians agree to subsidise the housing of poorer Australians through the tax system? For David Cant, social justice is reason enough. 
As a nation, we are sleepwalking into inequality. The settings we have got are dividing the community.
As housing inequality worsens it will touch more and more people. One day it could be an old friend, a sibling, a child, or a parent facing housing troubles. One day it could be you or me.
<hr>
This is an edited extract from <a href="https://www.textpublishing.com.au/books/no-place-like-home-repairing-australia-s-housing-crisis" target="_blank">No Place Like Home: Repairing Australia’s Housing Crisis</a>, published by Text on September 17.<img src="https://counter.theconversation.com/content/102840/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Peter Mares, Adjunct Fellow, Centre for Urban Transitions, Swinburne University of Technology
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/a-community-fix-for-the-affordable-housing-crisis-102840" target="_blank">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

A community fix for the affordable housing crisis: Peter Mares

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Sydney's cheapest weekend auction sale was a two bedroom unit located within minutes of Liverpool CBD and Liverpool Train Station.
"The unit is in desperate need of TLC and would be an ideal opportunity for a renovator or investor," the marketing indicated.
The second floor unit with single garage and balcony area fetched $344,000.
The unit had internal area of 58 sqm.
It was offered through <a href="https://www.realestateview.com.au/Real-Estate/12-13-speed-street-liverpool/Property-Details-buy-residential-9359164" target="_blank">Ray White agent Fabio Screpis</a>. It was among three weekend Liverpool sales under $400,000, and the only sales across Sydney at that price level.
The block's three most recent sales were $310,000, $300,000 and $290,000.
Sydney's most affordable property reported sold on the first weekend of spring was also a two-bedroom unit at 19/60-62 Speed Street, Liverpool sold for $355,000 through Prudential Liverpool.
Agent Simon Perri was quoting $320,000 plus.
Sales this year<a href="https://www.domain.com.au/sold/19-60-62-speed-street-liverpool-nsw-2170-2012172159" target="_blank"> in the block had hit $350,000</a>.
The likely rent by the investor buyer is estimated at between $300 and $320 a week.
There were four registered bidders, with it sold soon after auction.
Liverpool had three of the eight sub-$500,000 weekend sales on September 5.
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mick.cee-iDmgDDAmu8

Liverpool again Sydney's weekend cheapest

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A one bedroom Croydon Park unit was Sydney's cheapest weekend auction sale, reflecting a sale with a gross 4.7% yield.
It was<a href="https://www.realestate.com.au/property-apartment-nsw-croydon+park-120780917" target="_blank"> 1/9 Queensbrough Road</a> which sold to an investor through Unique Property Real Estate agent Hellio Dias.
The size was 42 sqm.
The now renovated 1965 apartment last sold at $200,000 in 2009, reflecting 10% annual growth after renovation. It was last up for rent in early 2014 with a $345 weekly asking rental.
There was only one other sale at below $500,000 across Sydney.
There were three sales under $500,000 around the Charmhaven district.
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Sydney's cheapest sold for $383,000 at Croydon Park

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PowerHousing Australia, the peak body representing 28 of Australia’s largest Community Housing Providers (CHPs), has welcomed Treasurer Scott Morrison’s commitment to deliver a raft of measures that address housing right across the lifecycle spectrum.
"From aiding new supply, to creating more social and affordable housing, supporting first home buyers and seniors looking to downsize, this package has been a while coming but signals a step in the right direction for fixing Australia’s housing affordability challenges," PowerHousing CEO Nicholas Proud said.
Adopting the UK bond aggregator model will open streams of institutional funds to increase the supply of social and affordable housing.
He said community housing providers, were the industry’s quiet achievers, well-placed to leverage these funding flows to maximise new housing stock.
“PowerHousing Members have, over the past 10 years, grown into credible scale managers, operators and developers of new and existing social housing dwellings and we do this by quietly achieving the highest level of social outcomes.
“While public housing has decreased by 24,000 since 2007, community housing in Australia has over the same period grown from 33,526 to 72, 410 dwellings as per the recent Productivity Commission Report on Government Services.
The community housing sector has largely built scale on the basis of property transfers and the Federal National Rental Affordability Scheme.
“Providing funds through to the community housing sector will deliver more affordable homes more cost-effectively and assist those on low incomes through to first home ownership with more options, new housing and the potential for a suite of wrap around services to aid training, education, health and livable outcomes.
“We will have to wait until the Budget to know whether the Treasurer will secure the deep funding measures that are required to meet the gap between what those in affordable housing can provide and what it is vital to deliver in terms of dwellings into the long-term future.
This is an integral part of the CHP model and we are hopeful this gap will be addressed in the upcoming federal budget.
“There has been some solid work undertaken in the states with reviews of New South Wales, South Australia and Tasmania showing good progress in meeting National Agreement Targets such as facilitating 35 percent of public housing being operated by the Community Housing Sector.
“Ultimately access to new finance streams, as suggested here, allows for the best return on government investment with more affordable housing delivered at the lowest cost to taxpayers – a win-win situation.
“Today’s announcements are a strong Federal Government acknowledgement of our CHP Members’ commitment to being commercially astute and achieve economies of scale by working with government, tier one/innovative financial lenders and scale developers to design and construct affordable housing options.”
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