Industry Super Australia (ISA), a research- and advocacy body for industry superfonds, was recently launched. new discussion paperThis paper aims at understanding the causes of the housing affordability crises. The paper also considered some useful policy responses in the “current and historical context”.

“Housing affordability has become a prominent issue after several years of double-digit price growth in certain major property markets,” ISA said in its report. “House price pressures are most acute in south-east Australian capital cities and certain coastal regional centres. The cities which are our economy’s engines of growth are also the places where housing stress is greatest.”

These areas are experiencing a price rise, which is causing many people to move further from their jobs and making it more difficult to commute. Strained housing affordability is also impacting society’s most vulnerable, with lower and middle income earners finding it increasingly difficult to balance earning a living with family and other obligations.


  • Because they can’t afford to live in the communities where they work, key workers like teachers and police officers have to commute long distances.
  • Adult children stay at home longer, marry later, and save more for a deposit.
  • Many older Aussies now live in large, unsuitable houses. However, a growing number of retirees rent or pay off mortgages.
  • More Australians rent than in previous decades.

“Australia’s housing affordability problem has developed over several decades and will require a long-term commitment to resolve,” ISA said. “While housing construction activity in 2016 and 2017 has kept pace with population growth, it has not dampened demand generated by years of under-building in certain key localities.”

This problem is made worse by the fact that low- to moderate-income households are not receiving enough attention to renting affordable housing. “In 2009, the National Housing Supply Council reported that the supply of affordable rental dwellings for low income earners had fallen in absolute and relative terms in the decade to 2006, despite a 20 per cent increase in the overall supply of housing. Since then the situation has only worsened.”

Different levels of government must cooperate to ease the crisis

According to ISA a pragmatic combination of housing policies across all levels would help balance out the imbalances within the major property markets.

“Federal, state and local governments need to find ways to coordinate activity without duplication or political interference,” ISA said.

Other suggestions from the advocacy and research group include:

  • The estimation of regional housing supply gaps can be achieved by linking federal government planning with state and local housing approval processes.
  • Encourage more students and workers to live outside of hotspots for housing.
  • Redirecting foreign investment to new residential properties
  • Australia’s land tax reform involves abolishing stamp duties and replacing it with a mix of land and betterment taxes.
  • Reorient the $12bn in federal tax concessions annually towards investment allowances in greenfield developments and institutional investments in new assisted housing.