Australia’s housing crisis is worsening. With Prime Minister Anthony Albanese having been elected to a second term in May, and with housing an important plank of his election campaign, surging demand caused home prices to surge throughout the states and territories in the March quarter. As a combined result, average house prices in Australia broke through the A$1 million mark. This milestone is emblematic of the broader, worsening reality facing countless Australians when it comes to finding an affordable home.
Albanese’s government seems to be committed to improving this situation, and it is trying to expedite the development process by removing red tape for developers. The Prime Minister highlighted the complexity of current regulations, stating, “One of the things that we have to do is to make it easier.” He continued to appeal that cutting out bureaucratic processes would save money for developers and in turn save it for would-be homebuyers.
According to NAR’s most recent report, even despite the scary surge in home prices, the annual rate of growth is finally starting to slow considerably. Michael Fotheringham, managing director of the Australian Housing and Urban Research Institute, says none of this shocks him. It’s the first time that threshold of A$1 million has been cleared,” he said. Beyond his story, he underscored the broader implications of the housing crisis. It harms not only the lowest-income households, but even moderate-income families.
“This isn’t just an affordability problem for lower income households – this is very much a problem for medium-income households as well,” – Michael Fotheringham
The home price ‘boom’ has been most extreme in Western Australia, South Australia, and Queensland. New South Wales (NSW) leads the nation as the most expensive state with an average home price of A$1.2 million. At the same time, Queensland is just a touch behind, with an average home price of A$945,000.
Australia’s total housing stock is over 11.3 million dwellings, consisting mostly of freestanding homes, as well as terrace houses and apartments. Australia currently grapples with one of the least affordable housing markets in the world. As a consequence, most Australians can no longer afford to purchase private homes, or even rent them.
The federal government’s plan would build 1.2 million new homes over five years. This huge commitment is all the more significant given that countries such as the UK and Canada are starting to realize their own housing crises. The UK government wants to see 1.5 million homes constructed during this parliamentary term (over the next five years). Its housing market represents a distinct mixture of council estates and social housing.
“Globally we’re seeing the term housing crisis being used in many developed countries,” – Michael Fotheringham
