Australia’s housing and rental crisis is continuing to worsen, with availability dwindling and prices skyrocketing due to demand.
Other factors such as high interest rates, 400,000 migrants expected to move to Australia over the next year and the rising cost of construction are also all contributors to the growing housing issues that are being felt across the country.
According to data from the Australian Bureau of Statistics, more than 120,000 Australians are experiencing homelessness and hundreds of thousands more struggling to pay to keep a roof over their heads.
The National Housing Finance and Investment Corporation (NHFIC) recently revealed more than 331,000 households were experiencing rental stress – defined as paying more than 30 per cent of their income in rent.
The group estimates that not enough properties will be built to keep pace with demand, resulting in an expected shortage of around 106,400 dwellings over the next five years.
This financial year, just 148,500 new dwellings are expected to be added to the national housing stock. The NHFIC forecasts that will drop to 127,500 in 2024-25.
Australia’s housing and rental crisis is continuing to deepen. Picture: Chris Pavlich/The Australian
The federal budget will be handed down tonight, with housing expecting to be one of the key issues.
Unfortunately, there is no “silver bullet” solution to fix the current crisis, with Dorina Pojani, Associate Professor in urban planning at the University of Queensland, saying what is needed instead is a “comprehensive package of bold interventions”.
Writing for The Conversation, she warned that if our country continues to ignore the housing crisis and lets the situation unravel even further, it will result in the “Brazilianization of Australia”.
In 1991, author Douglas Coupland referred to Brazilianization as “the widening gulf between the rich and the poor and the accompanying disappearance of the middle classes”.
Brazil is known for having a deep divide between the rich and poor, with the nation having the largest economy in Latin America but, at the same time, an incredibly high poverty rate.
Dr Pojani said if nothing is done to better Australia’s current housing crisis then we could turn into a country of “high inequality and exclusion in our lifetime”.
“This represents a dark future in which Australia’s long-held myth of a classless society will be shattered,” she said.
So what can actually be done?
Dr Pojani lays out five different policies for rental housing and home ownership that can help move the country out of its current rut.
Dorina Pojani believes Australia faces a ‘dark future’ if new measures aren’t brought in to combat the housing crisis. Picture: Gaye Gerard/Daily Telegraph
Caps on annual rent increases and no-fault eviction policies are common in Western Europe and North America, with the former ensuring increases do not exceed the inflation rate and the latter giving further protections to long-term tenants.
She also suggests rent assistance that is adjusted to reflect the actual rental cost trends of recent years and more social and public housing.
Student housing is another major areas where people are being exploited.
“While education is Australia’s third-largest export, students – both domestic and international – receive little accommodation help. This puts them at risk of exploitation and increases the overall housing pressure,” Dr Pojani said.
“Universities must be required to provide affordable dormitories on campus for the students they enrol.”
To help boost affordable housing for new homeowners, Dr Pojani says the housing supply must be increased, suggesting height bonuses and tax incentives be offered to developers to encourage them to build dense housing.
For areas where larger lots cannot be built, she says the construction of small, secondary units – such as a granny flat – next to existing houses should be encouraged.
Another measure is “inclusionary units”, which are dwellings in new developments that are sold at below market rates to “qualifying lower-income households”.
“Offering a percentage of inclusionary units in large-scale developments should be required nationwide,” Dr Pojani said.
An increase in free transition housing for people in crisis, such as those experiencing homelessness or domestic violence situations, is also needed.
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Finally, Dr Pojani suggests the government should offer assistance with both down-payments and loans for first time buyers.
“At the same time, investment properties and inheritance properties should be taxed at a higher rate to avoid market distortions and property hoarding by small-scale speculators,” she said. “Tax rules such as negative gearing should be abolished.”