Alan Kohler has published the latest Quarterly Essay, entitled, “The Great Divide: Australia’s Housing Mess and How to Fix It.” It is well known by us all that Australia has an acute housing crisis, a product of mass immigration as the site Macrobusiness.com.au has extensively documented. But Kohler discusses yet another worrying factor, that “all young people today – are paying more than twice the multiple of their income for a house than their parents – and their grandparents – did, and it’s only vaguely possible because both partners work to pay it off.” Housing prices are astronomical compared to the past, with August 2023 figures, the median Australian house price being $732,886, 7.4 times annualised average weekly earnings. Young people, living in a cost of living crisis only have a chance of paying this off with two working wages.
The problem in a nutshell, Kohler locates back to the turn of the century, where housing became very much part of speculative investment capital, whereas in the past, housing was for living. I think that is only partly true, and the big change, occurred after the end of World War II when migration began to really kicked in. I think the link between immigration levels and the commodification of land and property is the key to understanding the great transformation occurring now in Australia, and at least in the extract below, Kohler does not deal with this issue. For more see my article today “Big Business Privatises the Gains from Mass Immigration, While Putting the Costs on Us,” which goes into the real causes of our housing crisis.