A new study suggests the average cost of a home in Australia is now $1.3 million more than in 2008.
But the price of a house is not the only factor driving up the cost of living.
In the past two years, average house prices have gone up by 4 per cent, with house prices in some areas going up by 10 per cent.
And that’s despite the fact that house prices are up a lot in other parts of the country, including Western Australia, New South Wales, Tasmania, and Victoria.
It’s not just Sydney where house prices keep going up, Melbourne and Sydney suburbs have also seen the average house price go up, but the average price of an Australian home has fallen by nearly $200,000 over the past year.
This is despite the Federal Government taking $15 billion to subsidise the construction of new homes.
The study by The Australian Financial Group found the average Australian house cost $1,722,895 in December last year, up by 5.6 per cent on the previous year.
That means the average household has lost $5,927 in value, or about $2,200 a week.
The average house is now worth an average of $1 million more, with Sydney and Melbourne, Perth and Brisbane the biggest losers, with average house costs of $946,907 and $1 billion respectively.
The biggest losers are Perth and Melbourne.
The average Perth house price is now down by $936,400, while the average Melbourne house price has gone down by about $1m.
“While Australia is no longer an expensive place to live, the affordability crisis is not yet over,” the study’s author, David White, said.
He said this year’s “housing affordability crisis” was being exacerbated by a “substantial rise in interest rates” which, in turn, has pushed up house prices.
Australia’s housing market is also being affected by the global economic downturn.
We have seen a number of house price falls over the last few years, including the $500,000 to $1-million decline in February this year, which caused the price for a detached home to fall by more than 30 per cent from last year.
“With the global economy struggling to recover and unemployment still high, many Australians are experiencing severe housing affordability problems,” Mr White said.
“We are seeing a significant increase in house prices as a result of the global recession and are seeing an even more significant rise in the price in the wake of the election.”
The Federal Government’s $15-billion subsidy to build more houses has seen a major impact on house prices, which are at record levels.
House prices are at a record high in Sydney and Perth, and have also been in decline in other cities including Melbourne, Sydney, Adelaide and Brisbane.
Mr White said the Government’s “investment in the construction industry” meant more homes were being built, but “we have to remember the big cost drivers of house prices” were the “higher cost of energy and water and the costs of transport”.
The Australian Property Institute (API) said in the past five years the cost to buy a house in Australia had increased by about 50 per cent and the median price has risen by 40 per cent over that period.
While the Government was responsible for some of the increase in cost, the API said the overall cost of the average home had gone up at about 25 per cent compared to the year before.
“In other words, the average property has gone up a little bit more than it would have if it had been bought at the same time as the economic downturn,” Mr Wylie said.
“That is the sort of thing that is driving up house price prices.”
That’s because the economic recovery has done a good job of pushing up the value of the houses in Australia.
There are also a lot of people who are still holding onto their existing homes, which is keeping house prices relatively high and allowing for a lot more housing to be built.
“The API also said the “housing market is being fuelled by a number the Government has set as a goal, the number of new dwellings per household.
“The Government’s goal is to build enough homes to supply all Australians by 2020, which would result in an average house cost of $3,846,100.
However, the current average price is just $1 $1 000 more than that goal.
Despite the government’s goal of building 10 per year, the total number of houses in the country is currently at a high of almost 18 million.
The Government is also considering increasing the minimum wage to $15 per hour, and is also looking at a higher rate of stamp duty, which will increase the price per unit of housing.