Australia's Great Housing Crisis, Where 'To Be A Full Citizen Is To Be A Homeowner'

SydneyThe New South Wales government (with Sydney as its capital) commissioned a report last June from the Productivity and Equality Commissioner on the housing crisis, where demand does not match supply, and rents have risen by more than 40% since 2019. In his response, Peter Achterstraat.

The commissioner also pointed to other aspects such as relaxing building restrictions, increasing the density of urban areas near Sydney's business centre or building more public housing, which, according to data from the Australian Institute of Health and Welfare, has fallen nationwide from 341,000 homes in 2006 to 2006.

"When you fly over Sydney or look at an aerial photo, 85% of the development is low-density," says architect Philip Thalis. Decades of growth driven by low land prices and private transport have meant that 13 million rooms are empty in cities stretching for miles, with four-bedroom townhouses, where public transport is elusive and a coffee break is a five-minute drive or a twenty-five-minute walk across the road.

"Government are the people who have failed us in multiple ways over decades," says Thalis, who is also a university professor and has worked as a public consultant. "For a start, they have barely built any public housing for 30 years when the population has grown enormously." "For every apartment we build, we build six single-family homes," says Michael Fotheringham, director of the Australian Institute of Housing and Urban Research, adding that the design of cities and their environmental and economic impact needs to be rethought.

Over the past fifty years, Sydney has added 2.2 million inhabitants, while Australian houses have doubled in size on average, from 150 m² at 240 m², larger than the average in the United States or Canada. "If you have a growing population, increasing the number of houses makes sense, but the model of houses is important. We can't keep building 240 m2 houses,"² "on the outskirts of our cities," says Robert Crawford, professor of construction and environmental impacts at the University of Melbourne.

Forty per cent of Australians live in two cities, Sydney and Melbourne, and most of them live in their suburbs. Melbourne has 4.9 million inhabitants in an urban area that is eleven times the size of Berlin, which, with 3.6 million people, is the most populous city in the European Union. "The only accessible neighbourhoods are in the city centres, the suburbs are a desert," says Dr Dorina Pojani, professor of urban planning at the University of Queensland.

For Pojabi, the example of Brisbane, where the municipal government has allowed housing to be built on plots already built on, helps to increase population density in order to ensure public services and reduce car dependence.

Fotheringham also reviews how the tax system is favourable to investors, who can claim tax deductions on losses in property investments and have "discounts on any capital gains tax". This tax reform, approved by conservative Prime Minister John Howard in 1999, has favoured the purchase of second homes more than access to housing. In 2004, alerted by federal agencies that the price of housing would become more expensive, Howard and his treasurer decided not to change anything. Two decades later, housing costs nine times the average salary, in an escalation that has not stopped since the 2000s.

"Being a full citizen is being a property owner," says Libby Porter, director of the Centre for Urban Studies. "It's a kind of Australian culture, we talk about the cottage with a garden, your palace, you know? It's totally ideological and comes from a very deep-rooted culture imported with colonisation," she adds. "Australian housing policies have favoured investment in rental properties over purchase," concludes Fotheringham.

In fact, the current Prime Minister, Labour's Anthony Albanese, consulted with the Treasury on what tax changes could be applied and has approved the construction of 1.2 million houses in four years. In addition, this week he agreed with the support of the Conservatives to ban foreigners from buying homes for two years: "These kinds of things are influenced by the racist policies of the Liberals and [Peter] Dutton," Thalis criticises.

By 2024, the PopTrack Housing Affordability Report said that households earning $112,000 (€67,200) had only been able to afford 14% of properties sold on the open market. "Unaffordable housing not only strains finances, but also directly impacts mental health by limiting choice, increasing isolation and exposing people to substandard housing conditions," says Marlee Bower, a professor at the University of Sydney.

Meanwhile, one in three Australians is renting, which has doubled in price since the pandemic, adding pressure on lower incomes. According to CoreLogic and the ANZ bank, in 2024 the average income (around €60,600 per year) will spend 33% on paying the average rent (€380 per week), and will need an average of a decade to put together the down payment on a home. "We are one of the richest countries in the world and we have one of the most expensive and lowest quality housing markets," concludes Thalis. "I criticise governments, at all levels, and greedy developers, but the greediest are the banks: they make a fortune from housing and have stupid rules that affect lending, which not only affect developers, but also citizens."