The anarchy of development under capitalism is clearly revealed by the situation of housing in working class suburbs across Melbourne.
A Melbourne University research report, The end of affordable housing in Melbourne, said that rising housing costs had crippled the dreams of young people to have their own home. Dr. Bob Birrell, leader of the research team at the university, noted that “Melbourne will follow the Sydney pathway with new households having no choice but to adjust to apartment living as renters, fewer people moving into the city and more people moving out, and an end to the dwelling construction boom.” Even cheaper housing on the outskirts of the city was “well beyond the financial means of most first home buyers”.
The purchase price of apartments has also escalated in recent years, as demand has picked up in the inner and middle suburbs where amenities are better, and overseas buyers are active. But, “Even in the middle zone, the mean price of a unit/apartment had increased to about $423, 463 by 2010”.
In spite of the current slump in house prices over the past year, there are fewer sales as more working families find it harder to qualify for housing loans and to compete with cashed-up speculators and ‘negative-gearers’.
At the other end of this madness is a glut of 55,000 unsold homes in Melbourne, with 35,000 in the outer suburbs. Households caught with high mortgage repayments, lack of public transport and services, traffic congestion, insecure employment or unemployment, and the ever-rising cost of living, might want to sell up, but find they are trapped in “negative equity’ – their mortgage debt is greater than the sale price for their home.
What a crazy system! Even with falling prices, people can’t afford to buy, and people can’t afford to sell! Yet, against this background the Planning Minister Mathew Guy has announced the release of even more land for subdivision, enough for an extra 65,000 housing lots.