The dream of homeownership or even renting has slipped out of reach for many Australians, as soaring property prices, continuous rental hikes, and a shortage of social housing converge to create a challenging landscape for prospective tenants and buyers alike.
As the federal election approaches in less than a month, housing continues to be a critical concern for voters. The nation’s leading political entities, the Labour Party and the Liberal-National Coalition, have committed to addressing the ongoing crisis through various strategies.
Australians face significant challenges due to rising cost-of-living pressures while preparing for the potential impacts of Donald Trump’s global tariff war. The question now is whether either party can effectively persuade voters with their commitment to reviving the Australian dream.
Australia is facing a significant housing crisis. The country has failed to construct adequate homes to accommodate its swiftly increasing population. This shortfall has led to a scarcity of available properties, driving up the costs of purchasing and renting homes.
Australia’s restrictive planning laws exacerbate the situation, hindering the construction of homes in desirable locations, particularly in major urban centers.
Regulatory constraints have resulted in popular metropolitan areas such as Melbourne and Sydney exhibiting significantly lower density than similarly sized cities globally.
The ongoing reduction of public housing availability, coupled with escalating waitlists, has exacerbated the situation, pushing individuals into homelessness or forcing them into overcrowded living environments.
The impact of climate change has rendered numerous regions increasingly uninhabitable, as natural disasters like bushfires and severe storms devastate extensive areas of property.
In recent decades, government policies have increasingly shifted towards commercializing property ownership. The aspiration of homeownership, once regarded as a fundamental right in Australia, has now evolved into a lucrative investment prospect.
The answer varies significantly based on your location.
According to the 2023 Demographia International Housing Affordability Survey, Sydney is the second least affordable city globally for property purchases.
Recent figures released by property analytics firm CoreLogic reveal that the average home in Sydney is priced at nearly A$1.2 million (£570,294, $742,026).
The average house price across the nation’s capital cities has reached slightly above A$900,000.
In Australia, house prices have surged by 39.1% over the past five years, while wages have not kept pace with this dramatic increase.
A recent report from 2024 highlights that the typical prospective homeowner now requires approximately a decade to accumulate the 20% deposit commonly needed to purchase an average home.
The rental market continues to show minimal signs of relief. National rents have surged by 36.1% since the beginning of the COVID-19 pandemic, translating to an average increase of A$171 per week.
Sydney has emerged as the leader in rental prices, boasting a median weekly rent of A$773, as reported in CoreLogic’s most recent rental review. Perth secured the second position, with average weekly rents reaching A$695, while Canberra followed closely with an average of A$667 per week.
The housing crisis in Australia is frequently attributed to immigration and the acquisition of properties by foreign buyers. However, specialists indicate that their impact is not statistically significant.
According to Michael Fotheringham, the head of the Australian Housing and Urban Research Institute, many individuals relocating to Australia are temporary migrants. This group includes international students who opt for specialized student accommodation instead of participating in the housing market.
Mr. Fotheringham informed the BBC that the influence of migrants on the housing market is not as significant as some commentators have proposed.
In a recent move, the federal government has intensified its efforts to regulate foreign homebuyers by implementing a threefold fee increase.
Brendan Coates, a representative from the Grattan Institute public policy think tank, describes the matter as “a tiny issue” that does not significantly affect housing strain.
Recent figures from the Australian Taxation Office confirm this trend, indicating that homes acquired by foreign buyers in the 2022-23 period accounted for less than one percent of total sales.
Due to the current foreign investment regulations, foreigners face significant challenges when attempting to purchase homes. “They are subject to a wide range of taxes, particularly in certain states,” Mr. Coates explains.
Both Labour and the Coalition have made commitments to enhance housing availability. Labour has pledged to construct 1.2 million homes by 2029, while the Coalition has promised to facilitate the development of 500,000 homes.
Both parties unveiled housing initiatives designed to assist first-time homebuyers during their campaigns’ launch.
Labour has announced plans to broaden an existing shared-equity initiative. This initiative would enable all first-time homebuyers to secure properties with just a 5% deposit, significantly reducing the standard 20% deposit requirement.
Prime Minister Albanese has pledged that 100,000 of the new homes developed by his government will be exclusively reserved for first homebuyers. This initiative is part of a broader strategy that includes constructing additional social housing and introducing subsidies aimed at assisting low-to-moderate-income earners.
The Coalition has proposed a plan that would enable first-time homebuyers to access up to $50,000 from their superannuation retirement savings to assist in purchasing a house, should they secure election victory. First homebuyers of newly constructed properties will benefit from partially tax-free mortgage payments for up to five years.
The Coalition’s housing affordability policy prominently features a strategy aimed at curbing migration, limiting the influx of international students, and enforcing a two-year prohibition on foreign investment in existing properties.
The government has pledged a significant A$5 billion investment in infrastructure, which will assist local councils by covering the costs of water, power, and sewerage at housing development sites.
The Greens have focused on addressing the challenges faced by renters, advocating for national rent freezes and caps as part of their policy initiatives.
In a minority government, officials have indicated their intention to advocate for reforms to tax incentives aimed at investors.
Experts indicate that although the policies proposed by both Labour and the Coalition represent progress, they fall short of adequately addressing the housing crisis.
Mr. Coates expressed to the BBC that a merger of the platforms from both parties would yield a more favorable outcome than the current offerings from each side alone.
A report released in 2025 by the Urban Development Institute of Australia indicates that the federal government is unlikely to achieve its goal of constructing 1.2 million new homes by 2029, with a projected shortfall of nearly 400,000 units.
According to Mr. Coates, the Coalition’s emphasis on curbing immigration will likely result in only a slight decrease in housing costs, ultimately diminishing Australia’s economic prosperity in the long run.
According to him, the reduction in migration will lead to a decrease in the number of skilled migrants, which will cause a loss of revenue from these individuals, ultimately resulting in increased taxes for Australians.
According to Mr. Fotheringham, decades of underinvestment in social housing have led to demand far exceeding supply. With social housing comprising only 4% of the total housing stock, this figure is notably lower than in many other countries.
Concerns are mounting regarding grants aimed at first-home buyers, as they may contribute to further increases in property prices.
Mr. Fotheringham acknowledges the positive step of addressing these longstanding issues. Yet, he warns that resolving the housing crisis that has developed over decades in Australia may take years.
“As a nation, we have been gradually moving towards this situation without fully realizing it,” he states. “Currently, the nation is focused, and the political class is taking notice.”
