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Home ownership is increasingly unaffordable - and even getting a place to rent to avoid homelessness seems to be getting beyond the ability of numbers of Australians on what would recently have seemed to be adequate incomes.
It will be suggested below that this could well escalate into a massive social problem which:
A human perspective on the problem can be illustrated by the following:
Such cases are merely the tip of an iceberg as the extracts from recent articles below concerning housing affordability and homelessness illustrate.
Australia it is probably facing significant housing stress (ie difficulties for families in meeting the cost of housing) and homelessness brought on by:
And the problem will probably escalate because of the difficulties Australia increasingly faces in transforming its economy into one which can provide sufficient high paid job opportunities - noting:
Struggling to Cope
There are many programs by government and non-government agencies that are supposed to provide support to those who face such difficulties - but they don't seem to work. In Queensland the Department of Housing provides government housing - but there is such a waiting list that it is no longer a case of applicants being told that it will take ten years to gain accommodation. The waiting time is now indefinite. And there seems to be a potentially-socially-disruptive perception by potential clients that priority is given to aborigines and refugees at the expense of ordinary Australians. One organisation which provides support to those having difficulty getting affordable accommodation was perceived to be only interested in helping those who were able to work.
There is nothing new about the problem. In 2003 a seminar was organised by a Queensland church group which focused on the increasing problem of both domestic violence and homelessness in SE Queensland (see Is the Smart State a Just State: A Commentary, 2003). However the organisers seemed only interested in highlighting what governments should do to deal with the problem even though in both areas deficiencies in individual behaviour (which it is beyond governments to do anything about) seemed to be major factors (as family fragmentation and and fear of others seems to be a factor contributing to Australia's housing affordability / homelessness difficulties).
For reasons suggested above there is likely to be a significant rise in the incidence of housing stress and homelessness. This is likely to create severe difficulties for the federal government as it is both seeking to:
Any reliance on welfare as the 'solution' seems likely to be overwhelmed by the probable future escalation of the problem. Amongst other things that escalation is likely to add to government budget difficulties as well as potentially generating alienation and political discontent.
As for many social problems (eg see Gonski Review: An Example of the Limitations of Government Initiatives) the solution is ultimately likely to require strengthening the role that families play. For example, ff multiple generations live together the availability of housing relative to demand would increase - so housing costs should fall and affordability should increase. Likewise supportive families (if they are available) are most likely to be the best option for those facing risks of homelessness.
|About Housing Affordability and Homelessness||
Housing affordability does not seem to be a problem in UK except in London
where there are large numbers of people with high incomes. However affordability
measures based on relationship between loan repayments (with historically very
low interest rates) and incomes do not tell the full story - as interest rates
Real estate: The great investment delusion, 7/4/14
Recent price growth in Sydney and Melbourne (up 15% and 12$ pa) seems unsustainable. Also median house price ($535,000) is said to be 4 times average family disposable income - implying the latter is $175,000 pa. on the basis of available data (eg that average equity on home purchase is 32%) current dwelling price to income ratio for each capital and proportion f average disposable income needed to pay average mortgages. This suggested that housing is affordable to those with big deposit given low interest rates. When rates rise, housing markets will contract (especially in Sydney and Melbourne) 
Average living standards fell in December quarter 2013 (as wages rose 0.1% and prices by 0.7%) - and household outlook is now weakest since 1980s. Ben Phillips (NATSEM) said living standards fell for 3 of last 5 quarters - and only rose when interest rates fell. Government is concerned for future living standard falls (eg due to cost of heavy debt burden) but the problem exists now. Prices for major exports won't support income growth, there was no potential for income tax cuts, little scope to reduce interest rates and jobs market is weak. Inflation is currently likely to be 3% pa - at top of RBA's desired range. Structural factors are driving up inflation - and this is why wage weakness is not reflected in inflation 
The number of households drawing on (rather than adding to) their savings is at the highest level in 20 years. The numbers adding to savings was down 4% while 15.6% were drawing on savings - according to St-George-Melbourne Institute Household Financial Condition Index. 80% were in a stable position. 
Over 3m households have taken out larger and cheaper mortgages since the GFC - mostly at variable rates - and are thus exposed to changes by RBA. NATSEM (Ben Phillips) says that interest rates could rise and be a shock to the system. Since 2008 620,00 owner-occupied home loans have been written in Queensland - and Brisbane home prices have risen 12%. Most households already find their finances stretched. NAB survey concluded that people are really feeling the pinch 
Sources to consult
|About Economic Context||
Economists expect 
There is concern that Australia could face a jobs' vacuum for a couple of years and that Australia may be unable to fill the growth vacuum left by the mining boom. Housing, retail and tourism have been hoped to fill the gap, but (though they have surged) they may be unsustainable in the long term. A 'tidal wave' of unemployment has been seen to be likely because of shrinking mining activity, cuts to car / airline / telecommunications industries as well as in manufacturing and government. The rising cost of living pressures in mortgages, food, energy, education and health will also have an effect 
Wallace R 'Women victims of hidden jobless crisis' A, 5-6/4/14
Hidden unemployment is afflicting two groups of women - with underemployment not
seen since aftermath of GFC. John Black (Australian Development Strategies)
identified crisis underemployment for women 234-325 and 55+. Federal government
inherited economy providing just 238% of jobs population needed. As many now
give up looking for work or settle for inadequate hours discretionary spending /
retail and hospitality industries are suffering. The view that Australia dodged
the GFC is a myth - as we are in it now> Women have particular problems because
of need to care for children / parents or deal with family break-up. Technology
overtakes them and they don't have time to acquire needed skills.