Housing Affordability in Australia: An Intractable Problem?

A White Paper by Geoff Nunn

Disclaimer:  the comments and opinions expressed on this page are the personal views of the author, Geoff Nunn, and do not represent professional advice.

 

Treasurer Dr. Jim Chalmers

Housing Affordability in Australia: An Overview

We’ve heard a lot about the housing crisis in Australia over the last few years.  It seems incredible that a nation with our wealth and advanced technological capability should be unable to provide appropriate housing for a significant percentage of the population.  The problem can be summarized in five basic and interrelated categories:

  1. There is an estimated shortfall of approximately 250,000 houses required to meet demand in the Australian housing market in 2025.  This shortfall not only forces up prices but ensures that a significant number of people experience housing stress.  The Federal Government’s National Housing Accord target of 1.2 million new dwellings by 2029 is commendable, if unachievable.

  2. The high cost of residential housing is a barrier to entry into the market for many people.  As of September 2025, the national median house price in Australia was $920,000.  $1,056,444 in capital cities and $709,000 in regional areas.  Even those who successfully find suitable housing may be required to spend up to 50% or more of their disposable income on mortgage repayments.

  3. The high cost of residential housing forces up rental payments for those in the rental market.  The number of people experiencing rental stress continues to grow and is related to deteriorating mental health for many.

  4.  There is a wait list of approximately 170,000 for social housing.  This is a significant shortfall and highlights the fact that social housing across Australia has not kept pace with need.

  5.  It is estimated that 135,000 people in Australia are experiencing homelessness in 2025, up from 122,000 at the 2021 census.  Homelessness is a multi factored issue with many varied causes.  Crisis services are often stretched beyond breaking point to offer support.  The high cost of residential housing and rental accommodation are just two factors contribution to homelessness.  Social housing has not kept pace with demand.

Secure Housing as a Basic Human Right

Secure housing needs to be regarded as a basic human right in Australia.  Turning housing into an attractive investment option denies many this basic right.  The Federal Government has a mandate to address housing affordability and homelessness.  Some countries do it better than we do, such as Finland.  See Finland’s approach to tackling homelessness:  https://housingfirsteurope.eu/country/finland/   

 Rising house prices mean rising rents.  This contributes to homelessness, and it’s not just impacting on people reliant on a government pension.  A 2022 report by Council to Homeless Persons Victoria found that only 1% of housing in Victoria was affordable for people on the minimum wage ($948 per week).  We are now seeing a broader demographic falling through the housing affordability cracks with more people in the low middle income bracket experiencing housing stress.

Safe, affordable and secure housing is recognised as a human right by international treaties, the Australian Human Rights Commission and Amnesty International Australia.  Although, sadly, with the National Housing and Homelessness Plan Bill (2024) failed to pass the Senate late last year.  This Bill would have formalised Australia’s recognition of housing as a human rights issue and required the development of a national housing and homelessness plan. https://www.amnesty.org.au/senate-committees-failure-to-support-the-right-to-housing-affirms-urgent-need-for-a-federal-human-rights-act/

 

Outcomes From the Roundtable

The Roundtable ended with a sense of optimism. Various options for reform were put forward which were noted by the Treasurer. Independent Member for Wentworth, Allegra Spender, noted:

““The roundtable was a very valuable process to bring different voices and views into the room to address the issues facing our country. The hardest part – for all those who participated - will be ensuring we can now turn this moment into tangible action.” Ms Spender said.

https://drive.google.com/file/d/1CSZ1-2RWWb618UNnt5B03mJ8PhHgs4Nz/view

As well as a commitment to reduce red tape and compliance requirements for business of all types, there is optimism in the area for tax report to address inter generational inequity. The next 12 months will be telling and the Treasurer is well aware of the Government’s once in a generation opportunity.