Australia’s housing crisis has been laid bare – and there’s one major factor to blame

But Perth has seen the sharpest rise, with weekly rents jumping by $300 — an 86 per cent increase in just five years.

That’s on par with Brisbane, and there’s no sign of relief.

Some say this is the market doing what markets do. But markets need the right conditions to function and right now, those conditions are broken.

In many states, rental supply simply isn’t keeping up with population growth.

In Perth, just 694 new rental dwellings were added in the 18 months to September 2024 – while the state’s population grew by 119,000.

That leaves a shortfall of 7700 rental homes just to keep pace with population growth.

Vacancy rates reflect the same trend.

Sydney’s has hovered below 2 per cent for three years, and every other capital city (except Melbourne) has been stuck below 1 per cent.

Even with a slight uptick, our analysis shows it will take more than a year before increased vacancy has any real impact on affordability.

The effects are devastating.

Low and moderate-income renters are being priced out of inner and middle suburbs and pushed to the urban fringes – where housing may be cheaper but access to transport, jobs, and essential services is far more limited.

It’s not just renters who are struggling.

First-home buyers are losing out to investors, particularly in outer suburbs where rental yields top 6 per cent.

Build delays are compounding the problem, with average completion times now exceeding 10 months nationally – and a staggering 15.6 months in Perth, the longest in the country.

Some say this is the market doing what markets do. But markets need the right conditions to function and right now, those conditions are broken.

Years of under building, worsened by builder insolvencies, workforce shortages, and sluggish land release, have choked the housing pipeline.

We’re simply not building fast enough, or in the right places.

Governments have not been idle and initiatives such as the National Housing Accord and new investments in social housing are welcome, but the scale of the crisis is outpacing the response.

What’s needed now is more than spending — we need coordinated, long-term reform.

In the short term, we must expand rental support programs and make them permanent, particularly for those on low incomes.

Crisis accommodation must be reinstated and scaled up, especially for older women, victim-survivors of family violence, and First Nations Australians who are bearing the brunt of housing insecurity.

But relief alone won’t fix a broken system.

We need to grow the supply of social and affordable housing at scale.

Australia is 200,000 social housing units short of meeting current need which means we need fast-tracked developments on public land, support for build-to-rent models, and an introduction of inclusionary zoning in well-serviced suburbs.

We must ensure new supply matches the needs of diverse households, not just large family homes on the fringes but compact, affordable homes close to work, transport, and community infrastructure.

We also need to shift the incentives that shape housing decisions.

Replacing stamp duty with a broad-based land tax would free up housing stock and reduce transaction costs, and tenure reform could offer renters more stability while giving owners greater flexibility.

Critically, we must raise the bar on housing quality.

Over 300,000 Australian renters are living in poor-quality homes.

Minimum standards for safety, liveability and energy efficiency must be enforced – renters should not have to choose between affordability and basic comfort.

This is not just a housing problem. It’s a national challenge with social, economic, and generational consequences.

Every year of delay deepens the divide between renters and owners, inner and outer suburbs, secure and insecure households.

The Housing Affordability Report provides a practical roadmap – what we need now is the political courage to follow it.

That means leadership at every level of government, and partnerships with industry, the community sector, and civil society.

We must invest not only in homes, but in the systems and reforms that ensure those homes remain accessible, equitable and resilient.

Australia’s housing crisis is not inevitable – and it’s not insurmountable but fixing it requires more than headlines, it requires a shift from patchwork fixes to long-term solutions.

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