OPPapers.com

Australian Housing Crisi Ver1

Part One: A brief on the Housing Industry
• Big demand for housing and rental properties
In Melbourne today there are not enough housing properties to go around providing all Melbournians. The shortage of skilled labour and workers in the architectural and building industry means a big decrease in the Australian dream of owning a home.
• High Interest rates on mortgages
The Reserve bank of Australia has risen interest rates on twelve consecutive times in a row. The Age: Interest Rate Statistics has shown that interest rates in 2001 were around 6.05%. (For example a $300,000 home would pay $1942.08 extra). On February 2008, the rate had risen to 9%. (Now the buyer would have to pay $2517.59 extra).
• Inflation (Goods and Services value, going up)
Goods and services such as Petrol, milk and power are increasing their value overtime. The economy is simply going too fast which is causing inflation to explode our needs and wants up in value. The Reserve Bank of Australia has risen interest rates to slow down the Australian Economy and tackle inflation.
• Victorian Population Increase
The City of Melbourne is expanding at least 1,500 civilians every week (Herald Sun: 4/3/08, More land for homes). Premier John Brumby of the Labor Party of Victoria, has opened up blocks of land to expand the urban development zones in Melbourne.
• Negative Gearing
Currently there are problems with first home buyers competing with rental investors in buying their homes. Rental investors are pushing first home buyers out of the competition. The Age: Government Propsals (4/3/08) has shown statistics in an increase on rental investors buying more properties than first home buyers. Therefore first home buyers wouldn’t have enough money to repay the bank while the rental investors can due to the interest rate rises.
• Insufficient skilled Labour
On the Herald article – Our growing pains (5/3/08) on Premier John Brumby’s speech, he wrote: “we lead the nation in jobs creation, training...