The Australian Commonwealth Government is urging states to cut property taxes to ease the pain for first home buyers, as a new global study rated Australian housing affordability among the world's worst.
But there was some good news on the interest rate front for existing home buyers, or those rich enough to jump on the property ladder, with a government report showing business inflation pressures are easing.
Producer prices rose at their slowest quarterly pace in two years, largely as the result of falling oil prices.
"First home buyers can mark off the tame producer price result as the first step to the Reserve Bank leaving interest rates unchanged at the February board meeting," said Craig James, chief economist at Commonwealth Securities.
However, the Annual Demographia survey, released today by the US-based Wendell Cox Consultancy, rated every Australian city as "seriously" or "severely" unaffordable in a global study of 159 cities, with Sydney, Melbourne, Perth and Hobart among the worst 25 cities.
The survey looks at housing markets in Australia, New Zealand, Canada, Ireland, the UK and the US.
It rates housing "seriously unaffordable" when the median house price passes four times median household income and "severely unaffordable" when it passes five times median household income.
The least affordable Australian city is Sydney - where median prices are 8.5 times median income - even worse than London at 8.3 times income and New York at 7.2 times income. Perth was 8.0 times income.
Acting Treasurer Peter Dutton called on state governments to cut stamp duties on conveyancing and to release new land for development to make housing affordability easier for first home buyers.
His comments followed a report released yesterday by Australia's peak building body, the Housing Industry Association (HIA), that showed housing affordability had fallen to at least a 22-year low.
It also showed for the first time that Perth housing for first-home buyers is now less affordable than Sydney.
Mr Dutton said that in 2005/06 the states collected $10.8 billion in stamp duties, more than double the amount they collected in 2000/01.
This was despite record amounts of GST going to the states and territories.
"I call on all the state Labor governments to cut stamp duty on conveyancing now and make housing a whole lot more affordable for first home buyers," he said.
Source: AAP
