DR Stephen Kellie with Narelle Ashton, representing BCU which funded the study by Southern Cross University
DR Stephen Kellie with Narelle Ashton, representing BCU which funded the study by Southern Cross University

What price a dream?

By HUGH KEARNEY

THE Aussie dream of home ownership is quickly disappearing in the Tweed under the pressure of rising interest rates, higher prices and cashed-up sea-changers.

Last week's Reserve Bank decision to increase interest rates has been blamed for many intending home buyers delaying a purchase because they fear rising repayments.

A study completed by Southern Cross University (SCU), however, has shown that increasing interest rates is only one factor contributing to the decrease in housing affordability in the Tweed and elsewhere.

The study, conducted in the Tweed by SCU's Centre for Enterprise Development and Research and funded by the community credit union, BCU, found that the rising number of property investors and rising house prices were making it increasingly difficult for first-home buyers and low-income earners to enter the housing market.

Research Director Dr Stephen Kelly said the report showed that housing affordability was becoming an increasingly significant problem. In 1975, almost 70 per cent of those under 35 were home owners; by 1994 this declined to 55 per cent.

"Housing affordability is at almost record lows. The situation in the Tweed is really representative of the whole coastal strip from Port Macquarie up," Dr Kelly said.

"The number of investors in the market is displacing the home buyers.

"The investors have the ability to negatively gear and earn money from their properties so they are able to pay more," he said.

"In December 2004, for example, nearly one in four new mortgages across Australia were for investment purposes."

?Dr Kelly said prices in the Tweed had risen much more than many other places apart from Sydney, but the average incomes here were much lower.

He said the Federal Government's First Home Ownership Grant scheme, which was designed to support home ownership, had actually caused a significant jump in house prices due to the influx of new purchasers into the market.

This had largely undermined the benefits of the scheme, ultimately making it harder for first home owners and those on lower incomes to access the market.

Dr Kelly said in the Tweed Shire and other parts of the North Coast the influx of "sea-changers" was putting additional pressure on the housing market.

"There's a constant flow of cashed-up sea-changers, many of whom are retired.

"Eventually they are going to need services in health and hospitality, but the people who do the work, mostly on lower incomes, will have nowhere to live that they can call their own. That will have a whole range of other implications."

But there could be hope on the horizon for embattled home buyers.

Ray Battle from the community credit union, BCU, said there was a whole range of schemes, some of which were in place in Victoria and the United Kingdom, which could have a long-term posi- tive affect on home ownership rates and affordability.

"There are a number of community-based projects which have been very successful and these are run at the local level," Mr Battle said.

The report produced by Southern Cross University has recommended that round-table discussion forums be held on the Mid North Coast and Far North Coast involving key government, community and business stakeholders.

BCU is inviting anyone in the Tweed experiencing problems in purchasing their own home to contact Dr Kelly at SCU on 07 5506 9200 before March 18 if they are interested in participating in one-on-one interviews to con- clude this research.



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