Australia’s housing affordability crisis has intensified in 2025, driven by a combination of soaring property prices, escalating rents, and a significant shortage of housing supply. This issue has become central to the upcoming federal election on May 3, with both major political parties proposing measures to address the situation.
Key Factors Contributing to the Crisis
- Housing Shortage: The Urban Development Institute of Australia (UDIA) reports a projected shortfall of 400,000 dwellings in major cities by 2029, highlighting a severe supply-demand imbalance.
- Soaring Prices and Rents: The national dwelling value-to-income ratio has reached a record high of 8.0, indicating that housing has become increasingly unaffordable relative to incomes. Additionally, average-income households are now priced out of at least half of the postcodes in cities like Sydney, Adelaide, and Perth.
- Insufficient Public Housing: A decline in public housing availability has led to longer waitlists and increased homelessness, particularly among youth. In 2023–24, over 38,000 young people aged 15–24 sought homelessness services without family support or stable housing.
- Restrictive Planning Laws: Zoning restrictions and community opposition to higher-density developments in urban areas have limited the construction of new housing where demand is highest.
- Climate Impact: Natural disasters, such as bushfires and floods, have rendered certain areas uninhabitable, further reducing the available housing stock.
Political Responses Ahead of the Federal Election
With the federal election approaching, both the Labor Party and the Liberal-National Coalition have proposed policies to tackle the housing crisis:
- Labor Party: Prime Minister Anthony Albanese has announced a $10 billion housing initiative aimed at assisting first-home buyers to access 100,000 reserved homes. Labor also plans to build 1.2 million new homes and expand housing assistance schemes.
- Liberal-National Coalition: Opposition Leader Peter Dutton has proposed reducing permanent migration by 25% to alleviate pressure on housing demand. Additionally, the Coalition aims to revive a tax offset providing relief of up to $1,200 to over 10 million Australians in the 2025–26 financial year.
Despite these proposals, experts express skepticism about their potential effectiveness, noting that both parties may be avoiding the comprehensive reforms necessary to address the root causes of the housing crisis.
