AS the election campaign rolls on, housing remains a major issue, with both major parties unveiling policies in recent days.
Labor promises to expand access to its Help to Buy and Home Guarantee schemes by lifting income limits and price caps.
The Liberals propose allowing first homebuyers to access their super for a deposit, deduct mortgage repayments from income tax, and lower mortgage serviceability buffers.
While the promises are bold, it’s worth asking: what would actually work?
THE EXTENT OF THE PROBLEM
Australia’s housing affordability crisis has deepened over two decades. Between 2004 and 2024, the dwelling price-to-income ratio jumped from five to eight nationally, reaching 10 in Sydney.
Since Covid, advertised rents have surged over 20 per cent, while the public housing waitlist sits at 170,000 households. Homelessness has risen from 95,000 to 122,000 people between 2001 and 2021.
Policies of the past decade haven’t fixed it – and some have made things worse.
Housing is a cluster problem
The affordability crisis is a web of interrelated challenges: global economic forces, interest rates, inefficient construction and planning systems, and poor government policies.
While planning reform is important, it’s not a silver bullet.
We also need to tackle workforce shortages, construction productivity, financial risk, and developer behaviour – equally important in boosting housing supply.
It’s not supply or demand – it’s both
Most policies focus on either increasing supply or boosting demand. We need integrated policy packages that do both.
Current campaign promises largely aim to increase demand – helping more people buy – but this risks driving prices higher if supply doesn’t keep up.
Labor’s plan to build 100,000 homes for first homebuyers is welcome, but housing takes time to build and won’t meet demand spikes caused by buyer incentives.
Go beyond new builds
While construction is crucial, adding even 200,000 homes a year boosts housing stock by just 2 per cent.
We must also make better use of existing homes – encouraging secondary dwellings like granny flats or enabling subdivision can increase supply without new land.
Target the right people
Many housing programs aren’t well targeted. Support should go to those in real need – not buyers who can already afford a deposit and repayments.
Labor’s proposed changes will open schemes to higher-income buyers, while the Liberals’ super access policy disproportionately benefits older, wealthier Australians. Smarter targeting is essential.
Time to think intergenerationally
As Australians live longer, housing policy must reflect multi-generational needs. Replacing stamp duty with a broad-based land tax is widely backed by economists and would help both young buyers and older downsizers.
Stamp duty is a huge revenue stream – only South Korea relies on it more. Even if it isn’t abolished, the revenue could be reinvested in social housing, homelessness services, and infrastructure.
THE BIGGER PICTURE
Housing isn’t just about markets and construction – it’s where people live, grow, and age. Australians shape the housing system through their choices and aspirations.
By supporting diverse options – like secure rental, shared equity, and modular housing – governments can help steer demand toward more affordable, sustainable solutions.
By Rachel Ong Vifor, Andrew Beer, Emma Baker
Adapted from Theconversation.com.au (First published April 15, 2025)
