You’d think falling housing prices might help people on low incomes, but history shows downturns often increase inequality. And many buyers who took out big loans during the housing boom are at risk.
The apartment complex in Erskineville, Sydney, that is abandoned due to fears the homes are on contaminated ground.
Hundreds of thousands of Australians are forced into inadequate or unhealthy housing by high housing costs.
The housing boom increased wealth gains for affluent households while rising housing costs undermined income gains for less affluent households.
The Productivity Commission neglected the impact of housing costs. After allowing for these costs, the top 10% of households’ average disposable income grew at 2.7 times the rate of the bottom 10%.
It’s hard to get a fix on where Australia’s economy is headed.
Housing and wages loom as stubborn problems that could bring our economy unstuck in the year ahead.
Melbourne, city of cranes.
Image from www.shutterstock.com
Melbourne has seen tens of thousands of new apartments constructed over recent years, and apartment brands are flourishing. We can see striking typographic similarities with another economic frenzy: the 1870s cattle boom.
The renting class faces the unrelenting burden of ever-rising rents.
By focusing on intergenerational inequalities that will eventually be reversed, we are framing the housing affordability question the wrong way.