11 Dec 2011

Rising house prices put spotlight back on affordability

8:42 am on 11 December 2011

New pressure is being put on the Government over housing affordability as house prices again inch upwards.

Latest figures showing the price rises come ahead of an interim report by the Productivity Commission on possible solutions to the affordability problem.

Acccording to the commission's data, house prices have risen in real terms by 180% since 1990.

Home ownership rates tumbled over the same period and that trend is expected to continue as more people find the step into first home ownership too steep.

High house prices have also been faulted for directing money away from the productive sector.

The Government says further tightening of tax law on property ownership is unlikely.

However, it could look at the effects of migration, building sector efficiency or local Government restrictions.