How the Australian housing industry boomed into a generational problem

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The COVID-19 pandemic only exacerbated longstanding problems in the country’s housing market.

Locked down, cashed up and with nowhere to go one year into the pandemic, a new Australian dream of housing evolved.

“We have high housing prices because the price of land is high, which is embedded in each house,” he told the National Press Club earlier this month.“It’s high because of the choices we made as a society – where to live, how to tax housing and to invest in transport. That’s the issue.

“We’ve gone from a housing system that delivered people housing – now it’s become a system to get rich,” Martin says. From the late 1940s to the 1970s, home building vastly outpaced population growth. It was driven by state and federal government wanting to boost supply to increase home ownership rates.

Julie Toth, chief economist at property and mortgage transaction exchange PEXA, says Australia’s unique demographics drive demand for housing “ever upwards”. Its relatively strong population growth is coming more from new adult migrants than births. “Bear in mind that we only build typically 150,000 to 200,000 new homes a year,” Toth says. “That’s all of one year’s worth of housing supply taken.”

 

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