Australia’s housing market just reached a historic turning point. For the first time in history, the median home price has surpassed A$1 million. A newly reelected Prime Minister, Anthony Albanese, is riding a wave of success following his recent victory to a second consecutive term. He is making housing affordability a first-tier priority issue. Australians are grappling with a housing affordability crisis that affects not just lower-income households but those with medium incomes.
All states and territories saw home prices increase during the March quarter. Following closely was New South Wales (NSW), which was the first state to exceed an average home price of A$1.2 million. Third placed Queensland had an average price of A$945,000. Home prices continue to increase, but that annual rate of appreciation has begun to cool. As home prices appreciate at record rates, this shift is causing fears of an unsustainable housing bubble.
Michael Fotheringham is managing director of the Australian Housing and Urban Research Institute. He pointed out that the state governments of Western Australia, South Australia, and Queensland have done their part to inflate home prices. Importantly, he noted that the accessibility crisis is affecting all households, not just those with lower incomes.
“This isn’t just an affordability problem for lower income households – this is very much a problem for medium-income households as well,” – Michael Fotheringham
In Australia, the federal government has recognized for the first time how urgently we need to address the housing crisis. Their goal, in the next five years, is to develop 1.2 million homes. Albanese’s administration plans to reduce regulatory burdens on developers. This decision will help accelerate needed construction and alleviate some of the pressure on the heated market.
“One of the things that we have to do is to make it easier,” – Anthony Albanese
The rental market has been just as hard hit, as availability has gotten tighter and tighter in recent years. A found 30 per cent of adult Australians are currently looking for an affordable rental property, further deepening the impacts of the long-standing housing crisis.
Australia’s overall housing market is around 11.3 million dwellings, including detached houses, terrace homes and multi-unit apartments. Even with such a large number of choices, the country is still one of the most unaffordable countries to live in the entire world. This problem is particularly acute in our large cities.
“Globally we’re seeing the term housing crisis being used in many developed countries,” – Michael Fotheringham