Housing Affordability Policy in Australia: What is It and What Can Be Done to Improve It

The housing affordability crisis in Australia has been given much media attention and political focus over the past few years. Yet, there appears to be little consensus about what exactly the term housing affordability refers to and even less about how best to approach fixing it. The cost of housing and land packages Sydney has been increasing much faster than wage growth, resulting in rapidly rising housing affordability concerns from many households in the country. However, what is the problem with housing affordability, and how can this problem be solved? To better understand this situation, let’s start by defining what we mean by housing affordability and looking at the economic theory behind it. Also, an in-depth look at the effects of Australia’s current housing affordability policy will help us recognise possible solutions to improve it. In this article, we examine why housing affordability matters in Australia and discuss ways to address it.

Housing Affordability Policy in Australia

Housing affordability explains the relationship between expenditure on housing and household items. This concept is entirely different from ‘affordable housing,’ which is linked to low-income or social housing.

The wake of covid-19 led to the decline in the level of immigration, which added more weight to Australia’s housing affordability challenges. Low-interest rates are tied to this situation where the RBA refuses to raise interest rates to 1% and remain steadfast on their stance. This historically low-interest rate environment has aided strong property appreciation in recent years, while home affordability has become a growing concern for many people.

Estimating that at least 730,000 new social housing are needed across Australia within the next 15 years, Infrastructure Australia says it's a number that most people aren't aware of, showing the magnitude of the challenge. This has led to growing pleas from the property development industry for the NSW Government to reform the state's housing and urban design regulations in order to address the current shortage in housing developments.

What Can be Done to Improve Housing Affordability in Australia?

The Federal Government can take the following measures to improve Australia’s housing affordability policy.

• Reset the tax system to make the home buying process easier for first time home buyers who are looking for a home land package Sydney or want to buy a home.
• The Federal Government should provide incentives to state and local governments to boost the housing supply in good locations.
• Make housing cheaper for low-income learners to boost the housing supply.
• Increase commonwealth rent assistance to reduce the housing stress of low-income Australians.

Get in touch with the experts now to know more about Australia’s housing affordability policy and new home and land packages Sydney.

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