31/10/2012
The housing affordability squeeze in both the rental and ownership markets is forcing more Australians to share their homes - reversing a 100-year trend, a CEDA forum in Adelaide has heard.
The forum, to launch the November 2012 Trends Report prepared by BankSA and Deloitte Access Economics, heard that the number of people per dwelling was rising throughout Australia as people struggled to meet housing costs.
BankSA, Managing Director, Jane Kittel said in South Australia, despite recent falls in housing prices, housing, affordability continued to worsen and the great Australian dream of home ownership may remain out of reach for a new generation of young people.
The Trends Report found median mortgage prices in Adelaide increased by 43 per cent from 2006 to 2011, Ms Kittel said. Many people were also squeezed in the SA rental market where the median rent had risen by 8.7 per cent each year - more than double the growth in median income.
"Some families in Adelaide are downsizing their housing hopes and aspirations as housing costs bite," Ms Kittel said.
The forum, which also featured Deloitte Access Economics, Director, Chris Richardson and Philmac, Managing Director, Chris Stathy, heard:
- Increasing numbers of people live in group households in Australia and the age at which the last child left home has risen to 28 in Australia, suggesting that high house prices are squeezing some from the housing market;
- South Australian house prices have doubled between 2001 and 2011 but this is unlikely to be repeated;
- Outright home ownership has fallen to 35 per cent in South Australia but the proportion of houses occupied by an owner paying off a mortgage or being rented has risen;
- While many of the State's key industries have been further from the front line of "digital disruption" than those in other states, they must develop strategies to compete in an internet age; and
- SA should embrace skilled migrants to offset its ageing population; increase its labour force and stimulate economic growth.
"What concerns me is that we are not growing the availability of housing whether it be owned or rented," Mr Stathy said.
Yet the forum heard that as a manufacturing state, South Australia is "on the wrong side of the two speed (mining boom) economy" and could find a lot of hidden positives in the decline in commodity prices which had already brought Australian interest rates down.
"There are a bunch of positives for South Australia in the short term and, in the long term, resources will keep going - it will be the rise of the food demand and the beautiful opportunities you guys have got (in agriculture) - even more so if we get better policy nationally around water pricing," Mr Richardson said.
There are also magnificent opportunities in education and tourism, he said.
"The education that SA in general and Adelaide in particular sells to the world is a magnificent asset and the opportunities there will continue to grow for a long time," he said.
Business and government need to work on how to capitalise on the opportunities, the forum was told.
"We need to be really working through what are the types of investments we need to make now to make sure we can make the most of that growth opportunity... whether that be around transport, around port infrastructure, (or) road and rail transport throughout South Australia," Ms Kittel said.
South Australia's agriculture, tourism and higher education sectors were likely to be the big winners from an inevitable fall in the Australian dollar in the medium term as other large economies recovered from the financial crisis, the forum heard. Businesses would need to be ready to tackle competitive pressures caused by digitisation, particularly international competition via the internet.
Government policy - such as providing a better digital backbone in the National Broadband Network - could help businesses compete in the digital space but businesses themselves needed to be proactive, Mr Richardson said.
"It is up to businesses - and there are a whole bunch of levers, they can do things about their costs, they can do things about their revenue, they can do things about their strategy," he said.
"The one thing in particular when it comes to digital disruption is to look around.... because this stuff happens fast and the businesses that blew up, blew up because they just didn't see things coming."
In particular, the speakers warned Adelaide's higher education sector would need to develop an appropriate strategy to tackle competition from overseas universities such as Yale and MIT offering courses over the internet. This might mean merging universities in South Australia to consolidate resources.
"One of the areas we should be doing a lot more on is how to get industry and education to work better together to really leverage the intelligence we have here ...this is done a lot better overseas in places such as North America," Mr Stathy said.
The forum also heard that South Australia, with the mainland's oldest population, would need to be strategic about skilled migration to boost productivity and economic growth.
Although popular debate had focused on migrants taking Australian jobs - just as debate had pilloried married women for the same reason in the 1970s - skilled migration gave the local economy "a free kick" as it benefited from workers trained at the expense of another society, Mr Richardson said.
Ms Kittel said: "There's a lot more debate we need to have about how to attract people to come to South Australia"
"It's not about putting a new logo on but how we actually promote South Australia as a place to live and work for people who are looking for opportunities," she said.