Ethan Affordable Housing Express Serous Concern Regarding Rate Rise

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3rd November 2009, 09:31am - Views: 2706

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Tuesday,3rd of  November 2009




The likely decision by the RBA to lift rates tomorrow will only make the rental

market tighter and less affordable across Australia.  The rationale that higher rates

will dampen a housing price spike is little comfort to the majority of Australians that

can’t find accommodation without suffering rental stress.

“When you consider Federal Government findings have identified that the population

growth is becoming a serious problem due to increasing migration and fertility rates

the problem is going to get a lot worse,” said Mr Ashley Fenn, Director – Ethan

Affordable Housing.

“With the spike in population and a decreasing supply of housing, you don’t have to

be a genius to work out there is a looming storm that’s about to hit.”

“The number of new home sales fell by 4.5 per cent in September, according to the

latest Housing Industry Association (HIA) survey of Australia’s largest builders.

“Whilst the housing market has relied heavily on the first home buyers over the past

twelve months it is in danger of stalling further as the grants that fuelled the demand

are being wound down.

“Furthermore, without the return of the second tier financiers that were the main

lenders to investors and small developers the market may not have another class of

purchaser to drive the demand for construction,” Mr Fenn said

“ We are very excited about The National Rental Affordability Scheme, (NRAS)”

which the Federal Government has designed to take pressure off rental stress, but it is

unlikely to make an impact until a significant number of the dwellings are constructed

over the next few years.


“Demand for the NRAS subsidized homes that offer a 20% discount under market

rent is very strong, as families that would not normally seek rental assistance for

accommodation are finding that the rental stress is becoming a significant issue,” Mr

Fenn said.

“In our view the one size fits all solution of using interest rates to slow inflation is

actually causing the opposite, by raising interest rates and consequently decreasing the

housing supply the pressure on rentals increases”

“Addressing other issues such as the release of available land, planning delays, taxes

on housing and inappropriate land banking in urban areas could be some alternative

measure to keep prices down.”

”Nothing reduces prices more effectively than when supply exceeds demand,”

according to Mr Fenn

Media Liaison: Darryn Keneally 0410 344 761


Ethan Affordable Housing is a Not for profit organization that provides

affordable housing solutions to low and medium income families, identifying and

providing solution-based outcomes to the communities.

Uniquely, Ethan Affordable Housing combines business and private sector

investment with government assistance to create sustainable affordable housing


Ethan Affordable Housing is participating in the joint Federal and State

Government initiative to build and rent homes under the NRAS scheme.  Ethan

Affordable Housing received 148 approvals in September from the round two


Ashley Fenn has over 20 years experience in the construction and property

development sector, he sits as chairman and Director of Ethan Affordable

Housing Limited, Director of Ethan Property Group and holds interests in

Agriculture and International Trade businesses.

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