Australia's looming election brings housing crisis into focus

Australia’s escalating housing crisis has rendered homeownership and renting prohibitively expensive for average citizens. A confluence of factors, including soaring property values, consistent rental hikes, and insufficient social housing availability, has fueled this affordability crunch. As the federal election approaches, with housing affordability a key concern for voters, both the Labor Party and the Liberal-National Coalition have pledged measures to address this pressing issue. Australians are already grappling with broader cost-of-living pressures and anticipating potential economic repercussions from global trade tensions, leaving many uncertain whether either party’s proposals will effectively restore the traditional Australian dream of homeownership.

Fundamentally, Australia faces a significant housing supply shortage. The nation has failed to construct enough dwellings to accommodate its rapidly expanding population. This supply-demand imbalance has created scarcity, pushing up both purchase and rental costs across the board.

Exacerbating the issue are Australia’s stringent urban planning regulations. These rules restrict construction in desirable, densely populated areas, particularly major cities, limiting housing options where demand is highest.

vCard.red is a free platform for creating a mobile-friendly digital business cards. You can easily create a vCard and generate a QR code for it, allowing others to scan and save your contact details instantly.

The platform allows you to display contact information, social media links, services, and products all in one shareable link. Optional features include appointment scheduling, WhatsApp-based storefronts, media galleries, and custom design options.

Bureaucratic processes further contribute to lower density in major metropolitan centers like Melbourne and Sydney, in contrast to similarly sized global cities that accommodate more residents.

The ongoing decline in public housing stock and expanding waiting lists have intensified the problem, pushing vulnerable individuals into homelessness or overcrowded living situations.

Climate change also exerts an influence. Rising instances of natural disasters like bushfires and severe storms have rendered some regions less habitable, destroying considerable numbers of homes and further constraining supply in safer areas.

Moreover, decades of government policies have progressively transformed property ownership into a primarily commercial venture. Consequently, the aspiration of owning a home, once considered an accessible right in Australia, has increasingly become viewed as an investment opportunity, driving prices upwards.

The cost to buy or rent in Australia is highly location-dependent.

Sydney is ranked among the world’s most expensive cities for property acquisition, according to the 2023 Demographia International Housing Affordability survey, placing it as the second least affordable globally.

Recent data from CoreLogic, a property analytics firm, indicates that the median house price in Sydney is approximately A$1.2 million (£570,294, $742,026).

Across all capital cities in Australia, the combined average house price exceeds A$900,000.

Nationally, Australian house prices have surged by 39.1% in the past five years, outpacing wage growth significantly.

According to a 2024 “State of the Housing System” report, the average prospective home buyer now requires approximately ten years to accumulate the standard 20% deposit needed to purchase a median-priced home.

The rental market offers little respite. Since the onset of the Covid-19 pandemic, rents have increased by 36.1% nationally, equating to an average rise of A$171 per week.

Sydney leads the rental market with a median weekly rent of A$773, based on CoreLogic’s latest rental analysis. Perth follows with average weekly rents of A$695, and Canberra with A$667 per week.

While immigration and offshore property investment are frequently cited as drivers of Australia’s housing affordability crisis, experts argue these are not primary factors in statistical terms.

Michael Fotheringham, head of the Australian Housing and Urban Research Institute, explains that many immigrants are temporary residents, such as international students, who primarily reside in designated student accommodations, thereby having a limited direct impact on the broader housing market.

“The influence of migrants on the housing market is not as substantial as some commentators suggest,” Mr. Fotheringham stated to the BBC.

Brendan Coates of the Grattan Institute, a public policy think tank, characterizes foreign home purchases as “a very minor issue” with minimal meaningful effect on overall housing pressures.

Data from the Australian Taxation Office corroborates this view. In the 2022-23 fiscal year, purchases by foreign buyers represented less than one percent of total home sales.

“Existing foreign investment regulations already make it challenging for non-residents to buy property. They are subject to various taxes, particularly in certain states,” Mr. Coates clarified.

Both Labor and the Coalition have committed to increasing housing construction. Labor has proposed a target of 1.2 million new homes by 2029, while the Coalition aims to facilitate 500,000.

Labor’s recent budget included a A$33 billion housing investment plan. Key initiatives include shared-equity loans to assist first-time buyers with smaller deposits.

They have also pledged to expand social housing provisions and offer subsidies to improve housing affordability for low-to-moderate-income earners, both for renters and buyers.

A central component of the Coalition’s housing affordability strategy is curbing migration. This includes reducing international student numbers and implementing a two-year moratorium on foreign investment in established properties.

The Coalition has also promised a A$5 billion infrastructure fund to support local councils by financing essential services like water, power, and sewage at new housing development sites.

The Greens party has prioritized renter relief, advocating for national rent freezes and caps.

They have also indicated they would push for reforms to investor tax incentives should a minority government scenario arise.

Experts generally concur that while policy proposals from both Labor and the Coalition represent positive steps, neither platform alone is adequate to fully resolve the multifaceted housing crisis.

“A combination of policy approaches from both major parties would produce a more effective outcome than either party’s current individual proposals,” Mr. Coates commented to the BBC.

A 2025 “State of the Land” report by the Urban Development Institute of Australia projects that the federal government will likely fall short of its 1.2 million new homes target by 2029, with an estimated shortfall of nearly 400,000 dwellings.

Mr. Coates also suggests that the Coalition’s emphasis on reducing immigration would only result in marginally more affordable housing, while simultaneously diminishing Australia’s long-term economic prospects due to skills shortages and reduced tax revenues.

He elaborates that reduced migration means fewer skilled workers entering the country. The resulting loss of revenue from these migrants would necessitate higher taxes for Australian citizens to maintain current government spending levels.

Decades of insufficient investment in social housing have led to a significant gap between demand and supply. Australia’s social housing stock, at approximately 4% of total housing, remains considerably lower than in many comparable nations, according to Mr. Fotheringham.

Concerns also exist regarding first homebuyer grants, which some experts believe may further inflate property prices by increasing demand without addressing underlying supply issues.

While acknowledging the increased political attention on these critical housing challenges as a positive development, Mr. Fotheringham cautions that overcoming a housing crisis decades in the making will require sustained, long-term effort.

“As a nation, we have been inadvertently progressing towards this crisis for a considerable period,” he stated. “[But] now, the nation is paying attention, and the political establishment is taking notice.”