THE affordability of homes in Fiji can be solved if earnings are increased and interest lowered to stimulate the housing market, says the chairman of the Real Estate Agents Licensing Board (REALB), Dr Abdul Hassan.
Dr Hassan made the comments as real estate agents noted an 80 per cent increase in house prices in the country with most buyers being investors.
Multiple agents interviewed by this newspaper found that only 25 per cent of those buying property were first-time home buyers.
“A key concern in the housing sector is affordability and as a result a large number of people cannot invest in housing,” he said.
“To measure affordability, several researchers analysed that the house price to earnings ratio is important for prospective home buyers. It is claimed that lower interest rate allows households to pay low mortgage repayments. Many researchers believe that the combination of increased earning and lower interest rate stimulates the housing market by increasing take home pay and reducing the cost of borrowing, making housing more affordable.
“Affordable homes provide self-respect and self-esteem to homeowners. With affordable housing, young couples can devote more of their financial resources to raising their families and people with disabilities can then live more independently in user friendly environments. In the case of job losses, homeowners can manage changes if they are not overburdened with high housing costs.”
Principal realtor Rohit Chand of RHooker said at the moment the housing market was on a high.
“We have a healthy market from the sellers’ point of view and should be like this for another six to eight months. Demand for homes are high as well as construction costs, labour cost for constructions plus subdivision cost, which are pushing the land price up,” he said.
This article first appeared in The Fiji Times on August 23, 2016.