Property Analysis

Population growth fuelling the housing crisis fire

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The housing affordability crisis is a global one brought on by several facets including a booming population (Image by Dan Jensen)

While Australia's booming population is a contributing factor to the housing crisis, other elements are also adding to the dilemma, writes Michael Bayliss.

IN 1993, Australia’s population was 17.7 million. I grew up in Perth which then had a population of 1.2 million. Now, 30 years later, Australia’s population is over 26 million and Perth’s population is over 2 million. It is not just my chronological age that appears to be getting ahead of me.

Similar observations could be made for the average house price in this country. In 1990, Australian house prices doubled from their 1980 value of $76,500 to $184,600. Despite this, many discussions around my family dinner table centred on the fact that we were living in a lucky suburb in a lucky state in a lucky country. My family was grateful that Perth didn’t have Los Angeles-style urban sprawl or pollution, we weren’t all living in apartments like Tokyo and that, unlike European cities, buying a house was still affordable for the majority of us.

Perhaps we should have eaten our words there and then at that dinner table.

Today, the length of Perth’s metropolitan area stretches 150 kilometres from Two Rocks in the north to Dawesville in the south.  That is almost the same distance as travelling from north to south of Israel, from the city of Haifa to just before the Gaza Strip. That is quite a bit of additional concrete and satellite suburbs since 1993. Still, one might hope that all this busy work in paving over our coastline and fragile dune ecosystems might at least have resulted in affordable housing for two million of us. 

Think again. The Perth median house price is expected by some to reach as high as $770,000 by 2025. Median rental prices rose to $535 in February. Wages aren’t keeping up — our economy is too busy siphoning off the profits to a small number of billionaires.

As a result of the mining (and population) boom in the noughties, Perth became a leader in the race to become one of the world’s most unaffordable cities. Australia’s other capital cities soon followed suit, followed by most of our coastal regional centres. The same old story is now playing out across the nation, indeed across the globe — the housing affordability crisis is a global one.

Between 2012 and 2020, I lived across four private house shares in Melbourne. On average, I spent a third of my income paying off a landlord’s mortgage while dealing with housing insecurity and uncertainty, mould and other hazards, and the stresses of keeping costs down by living with more people than there were functional bedrooms. Many people I knew were living in house shares that bordered on being severely overcrowded, which fits under the broader definition of homelessness.

For much of 2021 and some of 2022, I was officially without a permanent address. One of the reasons I was out of home – again – in 2022 is that there was a potential severe asbestos hazard in my run-down rental house, for which I was paying over $300 a week. A fuller account of this experience may be read here.

I only just made the lower rungs of “the housing ladder” with the privilege of support from a relatively well-to-do family. Many friends and extended family don’t have this luxury which has created some interpersonal tensions. Land ownership is driving a wedge between the haves and have-nots and it is tearing apart human relations and the fabric of society.

Over the next two years, Australia’s population is likely to experience its largest two-year surge in population by 650,000. While in opposition, Prime Minister Anthony Albanese suggested that Australia needed a mature debate on population.

Now in government, he is overseeing one of the largest economic migration programs in Australia’s history. There has been no mature discussion with the voting public about how we are going to accommodate all these new people. The Albanese Government has committed to 30,000 new “social and affordable” homes at a cost of billions, to begin in 2024. However, this is a drop in the ocean against the demand that they themselves are politically engineering.

Of course, the housing crisis isn’t just about population growth.

It has resulted from many factors, including:

  • interest rates;
  • lending policies of financial institutions;
  • government tax incentives including negative gearing and capital gains concessions;
  • the lobbying power of property developers and the construction industry on federal policy and town planning outcomes; and
  • the rise of the short-term rental industry such as Airbnb. 

However, supply-side solutions have been very difficult to put into practice and the demand side of the housing crisis equation is often overlooked in public discourse, perhaps due to the taboo around an open conversation on population. It is also worth noting that the property industry enthusiastically encourages high population growth policies (as do many “big business” industries).

When I left school in the year 2000, John Howard was in power and it already felt like a harsher country compared to the cosier one I inhabited in the early '90s. A friend of mine shared a book with me on how to make money in the property sector. This was becoming very popular due to the Government’s active fiscal encouragement toward a culture of housing speculation. I told him it smelled like a Ponzi scheme to me. I was also concerned that Perth was growing too fast, too quickly.

Back then, I was accused of being an alarmist, anti-growth, anti-progress by my own generation. Two decades later, more of my generation are asking the same questions. Why are we living in a society that seems so enthusiastic to grow the population while simultaneously pricing everyone not a millionaire out of the country? Where can this mentality possibly lead us other than toward ruin?

Michael Bayliss is the communications manager for Sustainable Population Australia and co-founder of Population, Permaculture and Planning. You can follow him on Twitter @Miketbay83 and Sustainable Population Australia HERE.

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