Why are Australian houses so unaffordable? Prices are a result of the interaction of many different and complex factors – low interest rates, tax structures, an unprecedented period of continuous economic growth and high levels of migration. These are all difficult issues to solve, especially when most of the factors just mentioned do not fall within the traditional notion of ‘housing policy’.

Owning a home is becoming more of a nightmare than a dream for many Australians. Since 1970, our house prices have almost quadrupled while our wages have only doubled. House prices are escalating especially in Australia’s capital cities and has caused many Australians to be concerned about ever owning their own home. This is especially worrying for would-be first home buyers and lower income households as the likelihood of ever being able to afford to buy seems ever distant.

Even for those that can get on the property ladder, many are faced with crippling debt. While about two-thirds of Australian households are home owners, more than half of these households have mortgage debts.

Why are Australian houses so unaffordable? Prices are a result of the interaction of many different and complex factors – low interest rates, tax structures, an unprecedented period of continuous economic growth and high levels of migration.

These are all difficult issues to solve, especially when most of the factors just mentioned do not fall within the traditional notion of ‘housing policy’. The effects of housing affordability are not only being felt by Australian households, but the economy as a whole.

A lack of affordable housing near workplaces might affect labour market participation and labour mobility, which can then have a consequent negative impact on economic productivity.

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