EDITORIAL: We all suffer thanks to Australia’s housing undersupply

Just a few decades ago it was a given.

Get a job, work hard, save up, buy a home. Most couples could even do it on a single income.

For millennials and Generation Z, the path to homeownership today is a lot less linear.

Now it’s more like: get a job, work hard, save up, have those savings eaten up by punishing rental increases, try to save up some more, and have savings again eaten away by having to move every year or two thanks to a volatile rental market and housing insecurity.

Give up, and wait a few decades for your parents to die.

Buy a home.

If you’re not lucky enough to have parents rich enough to die leaving you a sizeable inheritance, you can probably forget about the whole thing.

For working and middle-class Australians, homeownership is no longer an expected reward for their toil.

Growth in house prices is far outpacing wage growth.

According to research by McCrindle, the price of an Australian home increased by 10.5 per cent between January 2023 and March 2024, while the price of units jumped 7.8 over the same period.

It will take an average Sydney first-homebuyer couple six years and eight months to put away enough for a 20 per cent deposit on a house in their hometown. Melbourne couples face a wait of five years and five months and Brisbane couples five years and two months.

High interest rates have complicated the homeownership puzzle further, particularly for those who may be hoping to take the leap with an undersized deposit.

We’re in danger of creating generations of lifelong renters. Those generations and the children they raise won’t know the sense of security that comes with homeownership that many of us take for granted. And, as the rental generations age and retire without homes, it will put an enormous strain on our welfare systems.

It’s in the best interest of us all to sort this mess out now.

Part of the problem, as National Housing Supply and Affordability Council chair Susan Lloyd-Hurwitz tells The Nightly’s Remy Varga, is that there’s no singular body responsible for delivering housing.

Instead, responsibility has been devolved to hundreds of authorities across local, State and Federal governments, making approvals a “very slow and cumbersome process”.

And, perversely, some of those authorities have a vested interest in actually restricting the housing supply.

NIMBY councils across the country delight in piling planning restrictions on developers, further limiting the number of homes that can be built in the face of increasing demand and in turn, inflating property prices further.

Then there’s the ever-increasing cost of construction, which has risen a whopping 40 per cent since 2020. That’s if you can get construction workers in the first place. The labour-hungry mining industry and ambitious public infrastructure projects in NSW and Victoria have contributed to a crippling worker shortage.

Australia needs some out-of-the-box thinking to solve this crisis. Waiting around for your parents to die is not a sustainable housing strategy.