“Quite diabolical” – BBC speaks to the inhabitants of Sydney of the housing crisis in Australia
The purchase or rental of a house has become unaffordable for the average Australian, driven by a perfect storm of the prices of astronomical housing, incessant rental increases and a lack of social housing.
With less than a month before the federal elections, housing remains among the main problems for voters, and the two major parties of the country – the Labor Party and the National Liberal Coalition – both promised to fight against the crisis in several ways.
Australians already have difficulty under pressure on the cost of living and the bracing for the effects of Donald Trump’s world tariff war. And it remains to be seen if one or the other of the parties will influence the voters with their promise to restore the Australian dream.
Why are the prices of houses in Australia so high?
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The inability of public housing to respond
In simple terms, Australia has not built enough houses to meet the requirements of its rapidly growing population, creating a rarity that makes any house available more expensive to buy or for rent.
The laws on the restrictive planning of Australia, which prevent houses from building where most people want to live, as in major cities.
Administrative formalities mean that popular metropolitan areas like Melbourne and Sydney are much less dense than comparable size cities around the world.
The constant decline of public housing and the waiting lists of hot air balloons has worsened things, changing people in roaming or overcrowded living conditions.
Climate change has also made many areas increasingly unlivable, with natural disasters such as bush fires and serious storms destroying large stretches of properties.
Meanwhile, decades of government policies have marketed property. The ideal of having a house, formerly considered a right in Australia, has turned into an investment opportunity.
How much should I buy or rent a house in Australia?
In short: it depends on where you live.
Sydney is currently the second least affordable city in the world to buy a property, according to an investigation into the affordability of the Housing of Demographia International 2023.
The latest data from the Corelogic real estate analysis company show that the Sydney Average House costs almost $ 1.2 million (£ 570,294, $ 742,026).
In the country’s capitals, the average combined price of average houses is at just over $ 900,000.
The prices of housing in Australia on the whole have also jumped 39.1% in the past five years – and wages have failed to follow.
It takes around 10 years the average potential owner to save the deposit of 20% generally necessary to buy an average house, according to a report on the state of the housing system in 2024.
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The rents jumped in major Australian cities, with Sydney, Perth and Canberra among the most expensive
The rental market has brought little relief, with rents increasing by 36.1% nationally since the start of COVVID – an equivalent increase of $ 171 per week.
Sydney dominated the graphics with a median weekly rent of $ 773, according to the last Corelogic rental review. Perth arrived second with average rents at $ 695 per week, followed by Canberra at $ 667 per week.
Do immigration and foreign buyers cause housing tensions?
Immigration and purchases of foreign properties are often mentioned as causes of the housing crisis in Australia. But experts say they are not statistically important contributors.
Many people who move to Australia are temporary migrants, such as international students who live in dedicated student housing rather than entering the housing market, according to Michael Fotheringham, head of Australian Housing and Urban Research Institute.
“The impact (migrants) on the housing market is not as deep as some commentators have suggested,” Fotheringham told BBC.
Purchases abroad of houses, for their part, are “a very small problem” with little significant impact on the strain of housing, explains Brendan Coates, of the group of reflection on the public policy of Grattan Institute.
The latest data published by Australian Taxation Office support it, with houses purchased by foreign buyers in 2022-2010 representing less than one percent of all sales.
“It is already very difficult for foreigners to buy houses under existing foreign investment rules. They are subject to a wide range of taxes, especially in certain states,” said Coates.
What have the main parts of Australia promised?
The work and the coalition have both promised to invest in the construction of more houses – the workforce offering 1.2 million by 2029, and the coalition promising to unlock 500,000.
Labor announced an housing investment plan of $ 33 billion in their last budget, which is committed to helping buyers for the first time buying properties with smaller deposits through credit in investment capital.
They also promised to create more social housing and subsidies to help employees with low income and to rent and rent more affordable.
At the heart of the policy of affordability of the housing of the coalition, reduce migration, reducing the number of international students and implementing a two -year ban on foreign investments in existing properties.
In addition, they promised an increase of $ 5 billion to infrastructure to support local councils by paying water, energy and sewers on housing development sites.
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Anthony Albanese (left) and Peter Dutton both committed to fighting the housing crisis in their campaigns
Greens’ policies, on the other hand, focused on reducing pressure on tenants by calling for national frosts and ceilings.
They also said that in the case of a minority government, they will push to reform tax incentives to investors.
What do the experts on the policies of each party say?
In short, experts say that if work and coalition activities are stages in the right direction, none is enough to solve the housing problem.
“A combination of the platforms of the two parties would be better than what we see on each side individually,” Coates told the BBC.
A report on the state of land in 2025 of the Australian Urban Development Institute said that the federal government will not achieve its objective of 1.2 million new houses by 2029, below nearly 400,000.
The focus of the coalition on the reduction of immigration, on the other hand, will only make housing slightly cheaper while making Australia poorer in the long term, according to Coates.
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Sydney is currently the second least affordable city in the world to buy a property
Migration discounts will mean fewer skilled migrants, he explains, and the loss of income for these migrants will result in higher taxes for Australians.
Decades of underinvestment in social housing also mean that demand in this area massively exceeds supply – which, at 4% of the stock of housing, is much lower than that of many other countries, according to Mr. Fotheringham.
There are also concerns about subsidies for the first buyers, which increases prices.
While congratulating the fact that these problems are finally dealt with seriously, Mr. Fotheringham estimates that it will take years to drag Australia with a housing crisis which has been built for decades.
“We’re going to sleep as a nation for some time,” he said. “(Now) the nation is careful, the political class pays attention.”
Additional and video report from Kellie Hight in Sydney
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