News and published articles in 2018 to 2016

  • Hunter households increasingly experiencing rental stress

    Tuesday, 20 March, 2018

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    Rental stress for Hunter households is growing, according to recent examination of housing affordability by the Hunter Research Foundation (HRF) Centre.

    Hunter house prices have grown strongly over the past five years. That forms a ‘barrier to entry’ for those looking to own their own home. To assess this challenge, the HRF Centre formulated a First Home Buyer (FHB) affordability index, which looks at income, house prices, borrowing costs and government concessions. This index was at its highest level (most unaffordable) in June 2017. It shows a dramatic worsening of affordability from the early 2000s. Despite a brief and sharp improvement shortly after the GFC, the Index has returned to elevated levels for most of the current decade.

    The poor affordability of housing has led to an increase in the number of households renting. Combining this trend with limited housing stock and rising rents has meant, in 2016, a higher proportion of Australian households were in rental stress than mortgage stress. Housing stress is defined by the Australian Bureau of Statistics as a household spending 30 per cent or more of their average weekly income on rent or a mortgage.

    Households paying 30 per cent of income on rent have a score of 100 on the Rental Affordability Index (RAI) published by SGS Economics and Planning. With a RAI of 110, regional NSW remains the least affordable of non-metro areas studied in all states.

    Across all Hunter LGAs we estimate the number of households in rental stress increased by 4,900 between 2011 and 2016, a 24 per cent jump. Growth in the share of households in rental stress across Hunter local government areas (LGAs) has been stronger than the national trend between 2011 and 2016. More than 8,500 Newcastle households were in rental stress in 2016, a 22 per cent increase on the number in 2011. In Muswellbrook LGA the number of households in rental stress increased by 37 percent, by 34 per cent in Cessnock and in Maitland by 45 per cent between 2011 and 2016.

    Figures for housing stress would likely be higher across the nation and the region, if the income measure used accounted for the recent growth in the cost of essentials. Electricity, transport and health are just some of the household costs that have risen at a faster rate than wages in recent years.

    Increases in rental stress, evidence of worsening rental affordability, places extra pressure on demand for social housing. There are approximately 4,500 social housing dwellings in Newcastle, according to Compass Housing’s Greg Budworth, who spoke at the Hunter economic breakfast on 16 February. He explained that around 1,900 households are on the waiting list. An average wait of five to 10 years means that these families are forced to compete in the regional rental market.

    House price and rental price growth are contributing to marked changes in the make-up of Hunter towns and communities. For instance, in Newcastle LGA we are seeing increased spatial sorting along income lines. Suburbs in and around inner Newcastle, and the rapidly gentrifying inner-west, have had a growth in median income that has greatly outstripped the rate of growth in average weekly earnings for NSW. Higher income residents are displacing lower income residents. Lower income residents are moving to the city’s outer suburbs where housing is more affordable.

    The need for affordable housing solutions to maintain socio-economic diversity in our communities remains pressing, so that Newcastle and the Hunter can retain appealing aspects of their character and integrity as they grow and change.

    Dr Anthea Bill, Lead Economist, HRF Centre

    This opinion piece was published in the Newcastle Herald on 5 March 2018

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  • Economic insights and mental health focus in the Upper Hunter

    Wednesday, 14 March, 2018


    Declining job security and unemployment have a negative impact on the sense of wellbeing among Hunter residents.

    Upper Hunter residents had lower levels of wellbeing than Hunter residents according to Hunter Research Foundation (HRF) Centre research. That suggests that they are more likely to be experiencing stress, depression, or mental illness.

    Between 20 and 30 per cent of the workforce are estimated to suffer from a serious mental health problem at some point during their working life. Suicide and non-fatal suicide behaviours in Australia are undertaken by 15,000 workers annually, according to Central Queensland University research. Suicide is a major cause of death among Australians of working age.

    Mine workers, small business owners, and farmers during extended drought are especially susceptible to mental health stressors. Health and wellbeing was explored at the HRF Centre’s Upper Hunter economic breakfast on 14 March in Muswellbrook.

    Download Upper Hunter Economic Indicators and Upper Hunter Businesses and Digital Technology

    Access the presentation from our speakers - Dr Anthea Bill, Hunter Research Foundation Centre and Prof Alan Hayes, Family Action Centre.

    Read more Dr Anthea Bill Download jpg (4.1 MB)
  • Unlocking the potential of the Upper Hunter

    Monday, 5 March, 2018


    Is the Muswellbrook of 2025 going to host intensive agriculture or will it be a renewable energy hub?

    The pros and cons of these options are being explored by a newly appointed ‘Upper Hunter Regional Economist’ based in Muswellbrook Shire Council and shared with the University of Newcastle’s Hunter Research Foundation Centre.

    The Upper Hunter Regional Economist will provide analysis of investment and economic development opportunities for the Shire. They will also establish a means to enable investors, businesses and households to track trends in social and economic indicators across the region to inform their long-term decisions.

    Mayor for Muswellbrook, Martin Rush, said the Upper Hunter Regional Economist would support the Shire Council’s strategies to strengthen the region’s economic base.

    “Muswellbrook Shire Council has a comprehensive economic development program underway to generate more jobs and grow the region.

    “To build a sustainable local economy, we need insight that identifies opportunities in the market where we have a competitive advantage. We have to identify areas of investment that will deliver the greatest returns.

    “Our strategy depends on this appointment because it enables us to get independent economic assessment and analysis when we need it,” Mayor Rush said.

    Based part-time in Muswellbrook and part-time in Newcastle, the Upper Hunter Regional Economist will also advance the HRF Centre’s research program.

    HRF Centre Director, Professor Will Rifkin, said the appointment aligned with the Centre’s focus on the region.

    “For more than 60 years, researchers in the HRF Centre have focused on deepening our understanding of how this region works. In more recent times, key developments have included the transition from mining in the Upper Hunter to a more diverse economy.

    “What we learn here in the Upper Hunter can be shared across the state, as well as nationally and internationally. It will help to inform the strategies of others who are facing similar transitions,” Professor Rifkin said.

    The Upper Hunter Regional Economist will commence working in Muswellbrook in the coming weeks.

    Read more Prof Will Rifkin
  • Hunter perspectives on housing affordability

    Thursday, 22 February, 2018


    The HRF Centre’s First Home Buyer (FHB) affordability index was at its highest level (most unaffordable) in June 2017. At the Hunter economic breakfast on 16 February, we asked a panel of local experts to comment on housing affordability in Newcastle and the Hunter.

    Dane Crawford is a member of the Property Council’s Hunter Future Directions committee and Director of Project Marketing at Colliers International. He said that the NSW Government’s investment in the light rail project had heralded a rapid rise in capital investment in private housing in Newcastle. It had attracted large companies not seen in the region before.

    When questioned about what would make developing affordable housing more attractive to private investors, Mr Crawford said that the government should provide incentives.

    “The cost of getting a plan through the system is ridiculous, and construction and holding costs are rising,” he said. “We need a clear incentive and a commercial outcome for everyone involved. Developers will not deliver affordable housing at a loss.”

    Compass Housing’s Group General Manager Greg Budworth agreed. He noted that government incentives like the now defunct National Rental Affordability Schemes helped to ensure that developers can continue to be developers. He also said that other nations mandate for affordability and density in housing.

    “In Singapore, the government mandates a whole range of things around housing development including density and distribution relating to socio-economic status or religion,” he said.

    Planning was critical to solve Australia’s housing affordability crisis, Mr Budworth said. Compass Housing recently released Towards a National Housing Strategy.This report assembles evidence from academics, published academic research, policy documents, conversations with experts, and the many non-academic publications that address varying aspects of Australia's housing crisis. It makes a number of recommendations that build towards the creation of a national housing strategy.

    Sharon Pope, Manager Integrated Planning said Lake Macquarie City Council was looking to improve the economics of developing housing in Lake Macquarie. They were reviewing planning controls to reduce some of the uncertainty faced by developers.

    “We need to improve certainty for developers and decrease the time it takes to navigate the planning system,” Ms Pope said. “As well as streamlining our processes, however, we need to get the community on board when it comes to medium density housing proposals.”

    Council had encountered community resistance to medium density housing development applications.

    “The community do not support clearing bushland on the city margins for development,” Ms Pope said. “But we also get opposition to medium density housing development applications closer to town centres.”

    When asked whether the conversation needs to shift from affordable housing to affordable living, the panellists agreed.

    Ms Pope said that reducing household spending on energy and cars would enable them to better afford housing. Council’s long-term strategies consider how to encourage building where people are adjacent to employment opportunities or able to access effective public transport options.

    Mr Crawford said Hunter people needed to shift their thinking about how we should live.

    “We expect to be able to drive our cars to work and have a car parking spot,” he said. “In Europe, where they have high density housing in their cities, they don’t provide parking because they have developed good transport links.”

    Mr Budworth agreed that Australia and the Hunter currently have an affordability crisis that goes beyond housing.

    Asked whether changes to negative gearing and capital gains tax would help first home buyers, Mr Crawford thought that would be an ineffective band-aid solution.

    “The population in increasing, we are not producing any more land, so the answer to solving affordability is bringing supply to the market,” he said. “One of the barriers to boosting supply is the time it takes to develop new projects.”

    Greg Budworth said that although negative gearing and capital gains tax concessions needed to be reviewed, there is a case for retaining them. He also said negative gearing could be more targeted to new residential builds to spur supply.

    “Negative gearing was promised to my generation to encourage us to try and create our own wealth, rather than relying upon the public purse in retirement,” he said. “It shouldn’t be ripped away from us.”

    View presentations on housing affordability by Greg Budworth and HRF Centre’s Dr Anthea Bill.

    Read more Download pdf (515.61 KB)
  • Housing remains unaffordable for Hunter’s first home buyers

    Thursday, 22 February, 2018

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    Housing affordability in the Hunter was the focus of the Hunter Research Foundation (HRF) Centre’s Hunter Economic breakfast in Newcastle on Friday, 15 February. The Centre’s lead economist, Dr Anthea Bill, said that Hunter median house prices showed resilience in the December 2017 quarter by rebounding from their September quarter dip.

    “Fewer investors and increasing supply of housing has seen median house price growth in the major metropolitan markets, particularly Sydney, starting to fall,” Dr Bill said. “In the Hunter yearly house price growth was six per cent and remained in line with five-year averages for the region, although recent quarter on quarter growth rates appear to be trending lower.”

    Strong annual growth rates were experienced in the Lower Hunter including Newcastle (11%), Lake Macquarie (8%) and Port Stephens (12%). Muswellbrook’s housing market rallied with 23 per cent price growth, as did the Upper Hunter Shire (14%). Singleton’s prices fell by 13 per cent.

    Continuing resilience in the Hunter’s housing market is one likely driver of high levels of regional business and consumer confidence in the local economy. In the December quarter, consumer confidence reached levels well above the long-term average. Hunter businesses’ confidence in the regional economy over the coming quarter is the best it has been since December 2009.

    While strong house price growth can have positive economic impacts, Dr Bill said that home ownership remained unaffordable for many Hunter residents.

    “The HRF Centre First Home Buyer (FHB) affordabillity index was at its most unaffordable level in June 2017,” she said. “We have tracked the index for almost 20 years, with a dramatic worsening in affordability in the region apparent from the early 2000s. Despite a brief improvement after the GFC, the index has returned to elevated levels for most of this decade. Record low interest rates have not been able to offset the impact for housing market entrants of rapidly rising house prices coupled with sluggish wage growth.”

    Other speakers at the breakfast included Greg Budworth, General Manager, Compass Housing, Sharon Pope, Manager Integrated Planning, Lake Macquarie Council, and Dane Crawford, Committee Member, Hunter Future Directions, Property Council of Australia and Director, Project Marketing, Colliers International.

    Download the December 2017 Hunter Region Economic IndicatorsView the breakfast presentationsRead more about the panel members perspectives.

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  • Digital technology key to productivity gains

    Wednesday, 13 December, 2017


    Slowing growth of multi-factor productivity is a concern for the Australian economy. Multi-factor productivity is a measure of the synergies between inputs of labour and capital that drive economic growth.

    Multi-factor productivity can grow through effective use of information and communication technologies (ICTs). Digitally mature businesses are more productive and competitive than firms that make relatively basic use of ICT.

    The HRF Centre’s Pulse survey gauges Hunter businesses’ use of ICTs annually. The surveys reveal that Hunter businesses have increased their uptake of digital technologies since 2014. That includes having a dedicated website and taking orders online.

    Sixty per cent of the region’s businesses used social media to advertise their business in 2017, outperforming SMEs nationally.

    While 83 per cent of Hunter consumers purchased goods and services online in the last year, only 22 per cent of businesses report accepting online payments.

    Download the HRF Centre’s 2017 Hunter Businesses and Digital Technology.

    Dr Anthea Bill, HRF Centre

    This opinion piece was published in the Newcastle Herald on 5 December

    Read more DR ANTHEA BILL
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