Australia may have escaped recession during the financial crisis, but its housing industry is showing worrying signs. Demand is outstripping supply, leading to a surge in prices.
Sydney is Australia’s most expensive city for housing – prices have doubled over the past 10 years – and is now one of the least affordable housing markets in the English-speaking world. Rental prices in the city are growing by 10 to 20 per cent a year.
The average house price in Sydney is AU$638,000 (€477,000). In Melbourne, prices aren’t as high – the average is AU$575,000 – but houses are being snapped up by investors from Singapore and Malaysia, or Perth buyers buoyed by the western state’s mining boom.
One possible solution is a housing quota for local residents. Andrew Harvey, senior economist at Australia’s Housing Industry Association, is sceptical. “Quotas are unlikely to achieve anything and could prove very unpopular. The only real, long-term solution is to increase dwelling supply – ie build more.”
- Perth: The state government wants to increase public housing by asking private landlords to sign 500 long-term rental contracts with them at 20 per cent lower than the market standard.
- Brisbane: An affordable-housing solution in the city’s inner north will create homes for 15,000 new residents – but is also set to double traffic congestion in the area.
- Canberra: In the capital, there has been a call for fewer houses: white-collar jobs are set to fall for the first time in 20 years and house-buying power will go with them.
In July, the first ATMs arrive on the tiny South Pacific island of Niue. With a population of just 1,400 in a country of just 260 sq km, inhabitants have relied on one dusty branch of the Bank of the South Pacific; it’s closed on weekends, the queues are long and the process of getting cash from a credit card is tortuous.
In earthquake-stricken Christchurch, the suburbs are the new downtown, at least as far as nightlife is concerned.
With the city’s central entertainment area in ruins, local tipplers have been forced to relocate to pubs and restaurant bars in outlying residential areas. The music scene, meanwhile, has responded to the destruction of live venues by holding concerts in sports clubs and private homes. These suburban venues have become a valued public space for rattled residents to meet and let off steam in the wake of February’s earthquake – the worst natural disaster in New Zealand’s history – transforming sleepy streets with an unorthodox intermingling of the city’s social tribes.
They don’t always mix well, though. Police have stepped up their patrols of the new hotspots and several neighbourhoods have introduced alcohol bans. A different trend, meanwhile, is taking place in Auckland, currently in the midst of a pop-up-bar craze. These short-lived ventures are emerging ahead of the country’s biggest celebration in decades: the Rugby World Cup kicks off in September with the city’s waterfront designated as the focal point for festivities. At its centrepiece, the Britomart precinct has been transformed from an unloved sprawl of warehouses and car parks into a boutique shopping and dining hub.
While Australia’s largest cities are struggling to deal with demand for housing, the northern state of Queensland is forging ahead and boasts some of the country’s fastest-growing suburbs.
CEO of CERA
As head of the Canterbury Earthquake Recovery Authority, Roger Sutton has an enormous demolition job ahead. But he is also in a rare position to build a radically better city.
Where do you start?
By giving people some dignity. There are still people who don’t know if they can rebuild and there are areas that are going to be abandoned. How is that land going to be re-used? The next priority is infrastructure, water and sewerage.
CERA has sweeping powers. Do you have all the answers?
Christchurch is small enough that the key people – business people, political leaders, community leaders – all know and trust each other. This is an opportunity to get everyone working together.
How long will the job take?
I’m not sure this job will ever really feel done. But I hope that within a year there’s a real sense of excitement that we’re building something better than we had.
We’re going to make sure that parts of the city are rebuilt closer to Hagley Park [the city’s largest park]. Better public transport. And there are some great things about our city – some beautiful historic buildings that have survived – and some big employers. We must take advantage of that.