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  • Writer's picturePeter Esho

The Housing Crisis: A Call for Action to Support Young Australians

After a reflective Easter break, it’s clear that there’s widespread dissatisfaction among young Australians (ages 20-35) concerning real estate, economic prospects, and their future. This societal issue demands urgent political attention and action.

Young Australians face numerous challenges: higher HECS debts, housing prices that are up to 15 times their incomes in major cities, and the lowest wage growth during a period of high inflation. They also contend with precarious employment, especially for those without a university degree.

A quick glance at social media reveals a deep-seated discontent among millennials. As Kos Samaras of RedBridge Group Australia describes it, addressing these issues will be like “a barn dance in a minefield.” Housing policy will be a pivotal issue in the 2025 Federal election.

Key Policy Implications to Consider:

  1. Increasing Housing Density: Future planning is likely to prioritize higher density housing in metropolitan areas rather than expanding into regional areas. This aligns with proposals from the NSW Government, favoring younger voters and potentially shifting demographics towards Labor.

  2. Reducing Migration: Given the difficulty in increasing housing supply, cutting migration might help alleviate housing demand pressures. This could be a strategic consideration for the Federal Government approaching the next election.

  3. Enhanced Shared Equity and Lending Support: While the First Home Guarantee Scheme is a step in the right direction with its 5% deposit requirement, current price caps render it ineffective. Significant policy revisions are needed to make a real difference.

Investing in real estate requires balancing returns, income, and capital gains. Despite higher interest rates, demand for property remains strong, with prices hitting new highs and unemployment staying low. Long-term success depends on keeping Australia an attractive place to live, work, and invest, avoiding the pitfalls seen in cities like San Francisco and New York.

Peter Esho is an economist and Founder of Esho Capital, with 20 years of investment experience.


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