Struggling Australians have hit back with force at the Reserve Bank governor’s “out-of-touch” solution to the country’s housing crisis, arguing he should take his own advice before telling others to get a roommate.
At a senate estimates hearing on Wednesday morning, Philip Lowe warned that not enough homes are being built to keep up with the nation’s population growth, consequently driving up rent and the cost of living.
“The vacancy rates in each city are very low … there are few things that have contributed to that,” he said, before explaining how the pandemic led to a decline in the number of people per household.
“People wanted more space, they were working from home … so the average number of people living in each dwelling declined and that increased the demand for the total number of dwellings.
“The population is increasing by 2 per cent this year, are there 2 per cent more houses? No,” he said.
Mr Lowe proposed the only way to fix this crisis was to continue raising rents and house prices, which he said would act as a deterrent for people wanting to move out from their parents’ house or live alone.
“The higher prices do lead people to economise on housing, don’t they? Kids don’t move out of home because the rent is too expensive, or you decide to get a flatmate or a housemate,” he said.
“We need more people on average to live in each dwelling and prices do that.”
But his solution has since enraged a string of young Australians who have grilled the governor by asking if he’s considered taking in a few roommates of his own.
“Pretty sure Lowe isn’t sharing his multimillion mansion with a couple housemates to keep costs down,” former journalist Tyron Butson argued.
Meanwhile, higher education reporter at The Guardian, Caitlin Cassidy, suggested a “petition” for Mr Lowe to try share housing in Sydney.
Author Jason Om was also left gobsmacked by the governor’s comments, prompting photographer Andrew Griffiths to reply: “When are we all moving into Philip’s house?”.
A Sydney barrister later ridiculed: “F**k yeah, I’m moving in with Philip Lowe! I can’t wait to check out my new rooms, I bet we’ve got a great view of something.”
“We are going to wear PJs and discuss the natural taste of unemployment and ethics.”
Meanwhile, homeowners who are also parents have indicated they too are struggling, suggesting Mr Lowe’s solution won’t be practical when they are unable to afford a mortgage.
“I’m about two more interest rate hikes away from being unable to maintain the mortgage on the family home of 14 years,” one Sydneysider tweeted.
“I’m just one single parent – with a special-needs child – being driven towards bankruptcy by Philip Lowe and I’m angry.”
Another parent offered for Mr Lowe to move in with them and their “family challenges”.
“You’ll need to pay one third of the rent and help with toddler tantrums,” they tweeted.
Another Australian labelled Mr Lowe’s solution a “bandaid for your bullet holes”, suggesting the short-term fix won’t help in the long term.
Deputy Director at Anglicare and Everybody’s Home spokesperson Maiy Azize also argued staying at home for longer wasn’t a feasible solution as young Australians are already living with their parents longer than previous generations.
“Working people are share housing until their thirties and forties. And many people on low incomes are stuck in overcrowded homes,” she said.
Ms Azize also alluded to the fact that such a solution could potentially increase domestic violence and impact worker shortages in rural areas.
“Women shouldn’t have to decide between sharing a home with a violent partner or becoming homeless,” she said.
“Lecturing people who are already the system’s losers won’t help.
“If the Governor is serious about tackling Australia’s housing crisis, he would join the call for more affordable and social homes – instead of putting more pressure on people who are already paying the price for a broken system.”
Australians need to make ‘sacrifices’
However, Wealth Through Property director and buyers agent Scott Levoune told news.com.au those who can afford to, need to make sacrifices if they want to buy their own home in the future.
“Over the last five to ten years, rents didn’t grow and a lot of people got comfortable and thought ‘hey, we’re a couple but we can get a four-bedroom house’. So what’s happening now … rents have increased and they’re not willing to sacrifice,” he said.
The entrepreneur explained bunking with a roommate or spending some more time living with parents could help.
“You should be allowed to buy a house because that’s what we deserve,” he said.
Mr Levoune then referred to a case where a Sydney woman and her friends copped a $250 rent increase, driving up their weekly payments to $1250 a week.
“If they came to Western Sydney, they’d be paying $500 a week between them,” he said.
“Within a year to a year-and-a-half, they all would have enough money set aside for a property they could buy. People have to make sacrifices.”
A more feasible solution proposed by Mr Levoune was for the government to encourage more local and international buyers to invest.
“We know people hate investors, and investors are scum for this, for that (but) we need more investors,” he said.
“Investors create supply – the less supply you have, the more demand there is. The more demand there is, the more people are going to pay.
“So what’s going to happen is these people who can’t already afford a home, they’re just not going to buy a home.”
Finally Mr Levoune called on the government to revisit their annual new dwelling figures, arguing the overpopulation issue stems from the country’s inability to build more homes.
“New properties obviously help with supply, and if we’re growing a few 100,000 people a year we need new homes,” he said.
“But they’re only building 200,000 homes a year, which is what they’ve always done. So even though they went ‘oh yes, we’re going to build another 200,000 homes’, that’s the same data as the year before and the year before that.”