Severely Unaffordable Australia: The Reserve Bank of Australia (the central bank) hasdescribed the considerable extent to which house prices have increased relative to incomes since the 1980s. The annual Demographia International Housing Affordability Survey makes similar findings, showing that the price of housing has doubled or tripled relative to household incomes over the past quarter century. All major markets in Australia are "severely unaffordable." This has occurred in a country that has long boasted one of the largest home ownership shares in the world, which epitomized the "Great Australian Dream." Until urban consolidation policies were widely adopted and strictly enforced, Australia’s housing affordability (measured by the Median Multiple, which is the median house price divided by median household income) was virtually the same as that of the United States.
That has changed radically. Over the past two years, the median house price in Melbourne, has risen by 30%.
Expanding Melbourne’s Urban Growth Boundary: In this environment, it comes as welcome news that the Brumby Labor government has enacted an expansion of the Melbourne urban growth boundary. The initiative attracted broad based support, including that of the Liberal-National opposition in the Victoria (state) parliament. The government expects that the expansion will "maintain" housing affordability.