Australia and the World Past and Present

Many people are finding it extremely difficult to find housing right now.

It is a problem that has become worse in recent years and shows no signs of improving soon.

There are multiple factors that have led to this situation.

One factor has been the shortage of housing stock. It seems that there are not enough dwellings to satisfy the demand. Australia has a growing population and the number of new dwellings is not keeping pace with that growth.

The federal 2024-25 budget devotes a section towards the housing situation in Australia.

The number of dwellings in Australia is lower than the OECD average. In 2022, there were 420 dwellings per 1000 people. New Zealand has even less dwellings per 1000 people than Australia does. At the other end of the spectrum, the countries with the most dwellings per 1000 people are Italy, France and Portugal.

Rental vacancy is Australia has been very low in recent times. It has been as low as 1.5% and even 0.5% in some major cities. The data shows that the problem has become more pronounced after 2020.

The median nominal dwelling value has gone from around $300,000 in 2004 to almost $900,000 in 2024.

Median nominal rent has gone from around $250 in 2006 to around $600 today.

The percentage of people’s income going towards loan repayments has increased from 29% in 2020 to 46% in 2023. The long-term average in Australia is 35.7%. More than 30% is considered to be within the zone of mortgage stress.

The price-to-income ratio for a house has increased. In early 2002 it was around 5 times income while in 2024 it is more than 8 times income.

The time taken to save for a house deposit has blown out form under 7 years in 2002 to well over 10 years now.

New public housing has been on a long-term downward trend since the 1970s.

the percentage of social housing stock has been falling since the 1990s and is now below 4% of the total housing stock.

All of this creates a very difficult environment for renters and those seeking to enter the housing market. Additionally, those with existing mortgages are finding it more difficult to keep up with loan repayments.

Not to mention the inflation impacting on food and fuel.

It is a difficult scenario for young people. They are spending more years in study. If they go to university, they are coming out with HECS debts that also need to be serviced. Further study usually means a delayed entry into the workforce with consequences for income.

Young people may, out of necessity, lead the country towards a different conception of ‘the Australian dream’. They may give up on the idea of home ownership and focus their energies on other things. Perhaps not. But right now, for many people, finding affordable housing is a challenge.