There was a time in Australia when owning a home wasn’t just a dream, it was a milestone that most young people could realistically achieve. This is Australia’s great housing lie, and how we can fix it. You worked, saved, and eventually bought a modest place to call your own. That era is gone, and with it, a generation’s sense of security and stability.
A new report from the Australian Property Institute paints a damning picture: in 1975, a Sydney home cost 4.2 times the average annual income. Today, it’s 13 times. Melbourne has more than doubled from 3.5 to 8.4. Nationwide, the average income-to-house-price ratio has more than doubled in 50 years. This is not a minor shift — it’s a full-blown affordability collapse.
And yet, governments continue to offer Band-Aid solutions. Stamp duty concessions, first home guarantees, and low-deposit schemes are trotted out like magic fixes. In reality, they inflate demand and push prices up even further — a short-term sugar hit that leaves long-term damage.
We’re told the problem is supply — and it is. But the real issue is political will. For decades, governments have been too timid to take on vested interests. Planning systems are a bureaucratic maze. Local councils drag out approvals, state governments hoard developable land, and housing policy is warped by tax breaks that reward investors over owner-occupiers.
The root of the crisis: structural, not cyclical.
This housing crisis is not a momentary blip. It is the cumulative result of decades of neglect, misguided policy, and misplaced priorities. We didn’t just underbuild — we built the wrong things, in the wrong places, while rewarding speculative investors at the expense of people trying to live in their own homes.
We’ve concentrated population growth in just a handful of cities without providing the infrastructure, transport, or jobs to support meaningful decentralisation. The result? Skyrocketing prices, hollowed-out regional towns, and a rental market stretched to breaking point.
Telling young Australians to “move regional” or “rentvest” is not a solution — it’s a cop-out. It’s a way of shifting responsibility from government policy to individual choices in a rigged system.
So what would real solutions look like?
If we are serious about fixing the housing crisis, we need more than half-measures. We need structural reform and political courage. Here’s where to start:
- Reform planning and zoning laws
Fast-track development approvals and dismantle the local veto system. Planning decisions that serve only the loudest voices — often wealthy homeowners in leafy suburbs — must give way to policies that prioritise broader societal needs. Introduce inclusionary zoning requirements for affordable housing in all new developments. - Redirect tax incentives toward first-home buyers
Negative gearing and the capital gains tax discount have distorted the market by encouraging speculative buying. Reform or phase out these tax breaks and redirect those billions into support for first-home buyers, public housing construction, or shared equity schemes. - Massively expand social and affordable housing
Australia needs a New Deal for housing. Not a few thousand homes over a decade, but a national, large-scale, publicly funded construction program that treats housing as critical infrastructure. This should include mixed-income developments, built and maintained to high standards, integrated into transport and job networks. - Use federal leverage to force action
The Commonwealth should tie infrastructure and grant funding to housing outcomes. States and councils that obstruct development or fail to meet housing targets should face financial penalties, while those that promote density and affordability should be rewarded. - Create a National Housing Strategy. Australia has no coherent long-term plan for housing. We need a national housing authority with teeth — one that sets targets, tracks progress, and forces coordination between all levels of government. Housing needs to be viewed through the lens of public health, productivity, and national security, not just economics.
- Embrace Urban Renewal and Medium-Density Development. Not every solution requires bulldozing farmland. Australia’s major cities are full of underutilised land, outdated zoning restrictions, and low-density housing near public transport hubs. Incentivise the “missing middle” — townhouses, duplexes, mid-rise apartments — especially in inner and middle suburbs.
- End the Rent Trap. Introduce national minimum standards for rentals, expand tenant rights, and consider rent controls or caps in overheated markets. A stable rental system is not a luxury — it’s essential when millions of Australians will never afford to buy a home.
- Build Real Pathways to Ownership. Support shared equity schemes where government or institutions co-invest in homes with buyers, lowering upfront costs. Create rent-to-buy pathways that convert long-term renting into eventual ownership. Make it easier, not harder, for young people to save, invest, and own.
- A Crisis of Vision, Not Resources. This is not a crisis of capacity — Australia has the land, capital, and talent to fix this. It’s a crisis of vision, of leadership, and of political courage. We know what works. Other countries — like Singapore, Germany, and Finland — have managed to maintain housing affordability through long-term public investment and smarter regulation. So can we.
We owe the next generation more than platitudes and piecemeal programs. We owe them a future where owning a home isn’t an impossible dream, but a basic and achievable part of adult life.
It’s time to stop lying to ourselves and to young Australians. The great Australian dream isn’t dead, but it is on life support. If we don’t act now, we’ll be the generation that pulled the plug.
