How Can We Keep Delivering the Australian Dream?

A woman walks past a real estate agent's sign advertising a house for auction in Melbourne on May 1, 2019. Photo by William WEST / AFP via Getty Images

Commentary

Migrants from around the globe have been attracted to Australia for its many wonderful attributes including the affordability of home ownership.

But the once much heralded and realistic Australian dream of home ownership is rapidly escaping the next generation.

Shelter is one of the basic human needs. Its affordability by way of rental or ownership is always a topic of discussion and consideration. It needs to be.

Home ownership gives you an economic stake in your neighbourhood and country. It provides roots and a sense of belonging and being part of the overall wellbeing of society whilst providing an asset for sharing with offspring on your demise.

Home ownership is so fully ladened with benefits it’s easy to understand why Australia’s most successful Prime Minister Robert Menzies had home ownership front and centre of his policy thinking.

In that era 60 years ago, the average Australian home was 120 square metres with an average occupancy of five residents.

Today the aspirations have virtually doubled. The average home is now 230 square metres but only has an occupancy rate of 2.5 people.

The cost of owning an average Australian home as a percentage of wages has sky rocketed.

The recent Australian inflation rate indicates housing costs are easily outstripping the general inflation rate.

People shop at a market in Sydney, Australia, on April 27, 2022. Saeed Khan/AFP via Getty Images

With its huge land mass, one could be forgiven for thinking that Australia has enough capacity and space to house many more people.

But the supply is limited and the demand is great and as the irrepressible rules of economics dictate the price for the commodity will increase. And so it has with Australian housing now for some many years.

Policy Difficulties

Given Australia’s ever-increasing rate of homelessness, many Australians are wondering at the government’s decision to increase the immigration intake and substantially so. The addition of literally hundreds of thousands of immigrants to Australia’s population will only exacerbate the housing crisis which is already so evident.

Australians are rightly asking from where will the housing stock emerge and how will the infrastructure of better roads and better public transport be provided.

The health and education systems are struggling and government budgets at all levels are already stretched to breaking point.

Yet in Canberra, there are the policy boffins who blindly believe that Australia can grow it gross domestic product by simply increasing the population.

Technically, they are correct. Each extra person may well grow the economy but unless they are exactly as productive as the current crop of working Australians there will be a dilution and diminishing of the average wellbeing of every Australian and their share of the GDP.

Policy makers will need to tread carefully to ensure that resentment towards new arrivals does not develop as Australians see the housing situation worsen and witness firsthand the unsustainable pressure on infrastructure.

An auctioneer counts down a bid during an auction of a residential property in Sydney, Australia, on May 8, 2021. Lisa Maree Williams/Getty Images

At a time of genuine cost of living pressures, an increase in the potential workforce will have a dampening effect on wages—another addition to the factors often overlooked in the immigration debate.

The difficulty currently being experienced could be alleviated by local government planning authorities adopting an attitude more conducive to liveable housing developments.

High rise, unit developments, and size of residential allotments all impact the cost of housing as do the obligations placed on developers.

With each new requirement or restriction one of the key factors in the cost of housing—namely the land component—increases.

A Mindset Shift the Key

The time has arrived for new land developments to move from the sea of shiny roofs on broad acre subdivisions to innovative planning that will provide greater returns for developers and a more liveable community with less need for travel.

A win for everyone is genuinely possible which in turn can increase the availability and affordability of housing.

The concept of an all-encompassing new town zone incorporating commercial and business with residential is needed.

Maximising the number of residents living within 400 metres (1,300 feet) of the town centre would alleviate traffic congestion and encourage people to exercise by walking to the needed facilities.

For the mindset to change it will take time, but strong persuasive leadership can expedite it.

Failure to do so in the face of government determination to increase migration will lead to resentment and social disharmony. If that happens, it could make governments think they need to be bold and decisive by placing price controls which in turn will see a flight of investment in an area desperately crying out for more. Then Australia’s social housing budget will need to soar, funded by the long-suffering taxpayer.

Getting Australia’s planning laws and infrastructure requirements into a better place would be a prudent public policy initiative prior to embarking on the highest intake of immigrants ever.

Australia’s world renown embrace of people from all over the world with its celebrated and successful multi-ethnic makeup could be at stake.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.