You are the worst government we've ever seen.

The Australian dream is about people owning houses.

The Australian dream is dying.

This idea of encouraging people to buy a house when you're young and accumulate wealth over time has made Australians the fourth richest people on earth.

But their housing market is on fire.

The median cost of a house doubled from under half a million in 2011 to nearly 1 million in 2024.

And wages didn't keep up.

Australia is a massive country, roughly the size of the United States without Alaska.

But they only have five large cities.

Sydney and Melbourne account for 40% of their total population.

And together with Adelaide, they're on the list of 10 least affordable cities in the world, where it costs upwards of 10 times the annual income to buy a house.

So more people are looking to rent.

Every place you go, there's like 20 people lined up out the door.

It is extreme but not uncommon to see dozens of people waiting in line for inspections.

This demand is one of the reasons why rents are now spinning out of control.

Our rent went up yesterday by 35%.

Placing the Australian dream of buying a house even further out of reach.

This is Australia's housing crisis with hindsight.

Please tell me I'm not the only one that feels like life in Australia right now is just so much freaking harder than it was even two, three years ago.

Across the Western world, the housing market is under stress.

But there is something fundamentally different about Australia.

I am nearly 27 years old.

And today I am moving back in with my parents.

The demand for rental properties is insane.

We didn't expect this.

The realtor made them wait for 30 minutes and judge for yourself if this apartment is worth it.

On Facebook marketplace, one landlord in Queensland was advertising single beds in shipping containers for $200 per week.

Another landlord offered his veranda.

So what's the deal with privacy between your sunny bedroom here and the rest of the unit?

What makes Australia's situation different is that they used to be the top of the class in terms of affordability, the percentage of people who owned their house, and they had fewer disadvantaged neighborhoods.

But that is changing.

In the 1950s, Australia was doing well.

They had some of the best living standards in the world and the economy was growing.

This is when the great Australian dream was popularized.

The ideal became to own a detached house on a quarter acre block in the suburbs with a garden and a Holden.

The true Australian car.

It now became affordable to own a car and there was a demand for space.

This led Australian cities to spread out.

Today, Melbourne is six times larger than London, but with fewer inhabitants.

Sydney is even more extreme.

It is 14 times larger than Berlin, but with only 2 million more inhabitants.

The government stimulated home ownership with policies like the first homeowner grant.

All these efforts worked.

Home ownership jumped from 52% in 1950 to a peak of 71% in 1968.

This happened in other countries as well.

But Australia was top of the class.

The great Australian dream is to believe that home ownership will lead to a better and more prosperous life.

This was backed up by government policies that kept housing affordable and within reach.

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So, housing is a fundamental part of the Australian way of life.

Their houses used to be exceptionally affordable, and they had high rates of home ownership.

That all turned upside down, and this is now a political issue.

Now, we told you at the time, of course, that Labor's housing plan was all pie-in-the-sky stuff.

Politicians and commentators will offer dozens of explanations that are in line with their political goals.

Yeah, the housing crisis, Andrew, is a crisis entirely of the government's own making. 2025 is election year, which turns on the heat.

It all comes from high immigration, have no doubt about it.

But let's back up a bit.

Where did it actually go wrong?

There was a major shift of priorities in the 1980s, from seeing housing primarily as a fundamental human right, towards investing in housing for profit.

The government incentivized people to buy a second home, and to put this on the market through rent.

This increased the number of investors on the market, increasing demand, and thus raising prices.

Negative viewing of property has been super effective at making a small army of well-off Australians even richer.

It is contested to what extent these policies affected housing, but especially on the left, it is often criticized.

The reason why it's bad is that it actually gives people an incentive to take out a loan, to compete with people who are buying just for a house to live in, and it massively distorts housing prices.

But this is part of a much larger puzzle.

Interest rates have been slashed to yet another record low.

We could very well see another quarter percent rate cut in the coming months.

This last decade was a wild ride.

Interest rates dropped and dropped even further, with the goal to support economic growth and to maintain inflation.

A historic drop in interest rates today, with the Reserve Bank slashing the cash rate to virtually zero.

During the pandemic, like in many other countries, they dropped to nearly zero.

These extremely low rates made it easier for people to get a loan for a house, which meant that it increased demand, thus raised prices.

On top of this, the government spent billions of dollars on programs that intended to help low- and middle-income families to buy their first house.

And it's harder for first-home buyers particularly to get into the marketplace, so that $50,000, that will really help them.

This helped a lot of Australians, but it also led to more demand.

And you see where I'm going with this.

A lot of factors led to more demand, and this wouldn't be a problem if it was properly balanced by more supply.

But that's one of the things that went wrong.

The number of government-sponsored public houses that were built dropped from a peak of 20,000 in 1978 to just 3,000 in 2023.

These houses are intended for people with low incomes, and they add a layer of security against homelessness.

Demand for this type of housing was increasing, but government investment significantly declined.

Another hurdle holding back construction was an increasing amount of red tape.

Surely the answer to our housing crisis is governments, as you say, at all levels, local, state, and federal, getting out of the way, so the private sector can satisfy that demand.

All those regulations drastically limit the private sector.

But there's more to it.

That's right, Chris, and certainly the biggest issue that's confronting the industry at the moment is about actually getting land ready for building in the first place.

One of Australia's challenges is that most demand is for houses near the inner cities.

This is where you'll find the best job opportunities, schools, and infrastructure.

But there is much local resistance.

Shame!

Premier, shame!

Shame!

Shame!

Shame!

Plans to build high-density housing is often met with protest. 20-story apartment towers in your streets!

They are demonstrating how we got here in the first place, why the status quo is not an option.

What homeless person can afford to pay a million dollars for an apartment in Brighton?

They can't.

Most people want more housing, but not in our backyard is the resounding chorus.

On top of this, there are supply chain issues and a shortage of workers.

We've got shortages of labor, shortages of resources in key critical infrastructure.

These factors put together resulted in insufficient supply, thus higher prices.

While all of this was going on, Australia in the past two years led in a record number of immigrants.

Their population growth is almost entirely driven by overseas migration.

It slowed significantly during the pandemic to just 25,000, but then it reached a record high with a peak in September 2023.

Critics argue that this was irresponsible, because it coincided with extreme difficulties in the construction sector.

It was now 40% more expensive to build a home than it was before the pandemic, and supply restraints led to a building to take 18% longer to be completed.

This added even more demand when supply was low, raising prices.

We have a crazy housing crisis here in Australia, and they've just let in 105,000 immigrants.

Can someone tell me where the f*** these people are living?

Immigration can help Australia fill gaps in its labor force, but it's also adding to already mounting domestic pressures.

I, for the life of me, cannot understand why this labor government has just slammed the door shut on this mass immigration until we've got enough housing for Australians right now.

In 2024, it became an increasingly political topic.

The peak of record immigration coincided with five consecutive quarters of a shrinking GDP per capita.

The longest recorded decline in Australia's history.

It also coincided with a record increase of what Australians are paying for rent.

This is all part of a worrying long-term trend.

In 1971, these were the average house prices in Australia's main cities adjusted for inflation.

By 2024, they had more than quadrupled.

This is happening all around the world, but in Australia, it's more extreme.

In 1987, a house in Australia cost 2.8 times the annual income, similar to other countries.

By 2019, this was up to 6.9 times, outpacing the US, Canada, and the UK.

But in 2023, it went up to 9.7 times the annual income, the highest in the world after Hong Kong.

The great Australian dream of owning a house and accumulating wealth over time is getting out of reach.

A full-time worker on a minimum wage now spends on average 68% of their income on rent.

This makes it impossible to save up for a down payment on a house.

This increases the number of people that will always rent, while homeowners are becoming incredibly wealthy.

The fear is that this can create a two-class society.

Wealthy homeowners against disadvantaged renters.

In 2025, there are elections.

We are the party of the great Australian dream, and we are going to keep that dream in reach of the next generation of Australians.

Prime Minister Al-Banisi focuses on supply.

The fundamental answer to all of this, of course, is supply, building more homes.

In 2024, he announced a $32 billion plan to reduce the cost of housing.

This is a plan to address the housing crisis.

Edit Centre is a plan to build 1.2 million new homes over the next five years.

This is new money right now for social housing.

But his critics are skeptical.

Now they announce, oh, we'll build 1.2 million.

Now, 1.2 million houses they're going to build in five years in Australia, where are you going to get the builders from?

The RBA has already increased interest rates to almost where they were in 2011.

This makes mortgages more expensive, and this should result in less demand.

The causes of this crisis, we know what they are.

There's a lack of building of public housing.

There's also these massive tax breaks.

The debate about tax breaks is once again rekindled.

So is the debate about immigration.

And at the same time that Australia is building a record fewer homes, they've brought in a million new migrants.

It is not about one of these issues, nor is it about all of them.

It is about balancing supply and demand, and this can be done in many ways.

You could lower immigration, accept all the good and bad that this will bring, and demand will go down.

You could also overhaul the planning restrictions and accept the consequences, which might stimulate supply.

It is not possible, nor desirable, to include all factors and possibilities in a debate about housing.

That's why politicians and commentators often simplify the issues into a couple of talking points that resonate with their voters and viewers.

This is, of course, happening all around the world.

But Australia is unique in that it transformed from having one of the best and most affordable housing markets into one of the worst and least affordable.

And then perhaps nowhere else, homeownership is so intimately connected with their national identity.

A reasoned foal asked the question, do you think owning your own home is part of the Australian way of life?

And 93% answered, yes.

To the follow-up question, are you concerned about being able to buy a house during your lifetime?

68% answered, a lot or a little.

It is now up to politicians to convince Australians on how to best address this issue.

But there's at least some consensus amongst economists.

In a recent poll, most agreed to ease planning restrictions and to provide more public housing.

There is also support for tightening tax laws that stimulate housing as an investment and to reform how states collect taxes on housing.

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