Current housing system 'is unsustainable'
Leaders of the Housing Industry Association (HIA) believe Australia's property market is still in the doldrums and the government needs to take action in order to rectify the situation.
The organisation has released the winter edition of its National Outlook and it makes for bleak reading.
It has predicted the number of new housing developments in 2012 to fall by 11.5 per cent, which follows on from an 11.2 per cent decline last year.
HIA chief economist Dr Harley Dale said the country is under-building by a significant amount and this could be very damaging to the nation's overall economy.
He remarked: "HIA has noted for a considerable time the risk that new housing again revisits levels experienced as a result of the global financial crisis."
Mr Dale added that many Aussies are put off from buying a new home because of the uncertain economic climate and the huge amount of tax that has to be paid on new developments is not helping matters either.
Indeed, he stated that around $200,000 of the price of a new property is attributed to tax.
"It's an unsustainable situation," Mr Dale commented.
"[Improving] the conditions facing new home building not only requires further interest rate cuts, but also Commonwealth and state government action to boost confidence and lift a substantial portion of the tax burden from new housing," he continued.
New figures obtained by the Herald Sun from the Australian Bureau of Statistics have also shown that many people are finding it increasingly difficult to repay their mortgages.
One in ten households are committing in excess of 30 per cent of their gross income towards their home loan repayments. This is the threshold when people are deemed to be financially overstretched.
It is hardly surprising that a growing number of people are suffering from mortgage stress in Australia, as the cost of living in cities like Sydney and Melbourne has increased at a faster rate than the average wage.
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