1. Introduction


For many people, the Great Australian Dream is to own your own home. Yet for millions of Australians home ownership will remain a dream.
Australia seemingly has land aplenty and some of the highest wages worldwide, and yet we have some of the least affordable housing in the world. House prices in Sydney and Melbourne are now only outranked by house prices in cities like Vancouver and Hong Kong. In some areas of Australia, rent is prohibitively expensive. For example, in March 2021 not a single private property advertised for rent in Canberra was affordable for households receiving working-age social security payments.1
The statistics tell the story. As Mr Saul Eslake, economist and the Principal of Corinna Economic Advisory told the Committee:
Once upon a time, Australia had one of the highest rates of homeownership in the world. Our homeownership rate rose from 52.5 per cent in the years both immediately before and after the Second World War to a peak of 72.5 per cent in the census of 1966, which was an extraordinary achievement considering how rapidly Australia's population grew during that period.2
Home ownership began to fall over the following years, arriving at 65.5 per cent at the 2016 census, and lower again to 62.7 per cent in 2019.3
Mr Eslake suggested that the single largest factor for this decrease in home ownership is that ‘average property prices have more than doubled as a multiple of average household disposable income over the past 30 years, that ratio having been reasonably stable over the preceding 30 or 40 years.’4 Indeed, Mr Eslake cited analytics from CoreLogic which show that Australian residential property prices rose by 313.5 percent between January 1991 and September 2017.5
Australia’s housing affordability predicament places us 27th among the 38 Organisation for Economic Co-operation and Development (OECD) member countries, and 5 percentage points below the OECD average.6
The OECD states that satisfactory housing is a critical element in meeting our basic needs, and that a home involves more than just a dwelling with four walls and a roof.7 A home should provide safety, privacy, and security - a place to sleep, eat and raise a family. The OECD raises the critical question of whether people can afford adequate housing.8
The need for adequate housing has been highlighted even further recently. During the past two years of the COVID-19 pandemic, governments have required many people to stay at home as part of the suite of public health measures, making satisfactory housing conditions even more important.
PowerHousing Australia, a membership body for larger-scale community housing providers, noted that the COVID-19 pandemic has ‘highlighted the need for stable, safe and affordable housing. As Australians have been forced into lockdown in their homes, housing has become a central component of the COVID health response.’9
It seems however, that home ownership has become more than securing a roof over one’s head. When Ms Nicola Lemon, Chair of PowerHousing Australia appeared before the Committee, she touched on the issue of the ‘financialisation’ of the housing market in Australia and across the globe, pointing out that currently, the global value of real estate is US$217 trillion - more than twice global growth domestic product (GDP).10 Ms Lemon stated:
The financialisation of housing and the use of housing to park, grow and leverage capital has been something that's been happening significantly across the globe and absolutely occurring in Australia. So, rather than housing being a commodity for a mum and dad with a mortgage, it's actually been financialised. It's based on the idea that housing is a liquid investment, an available commodity with an amount of capital available to invest in it.
CoreLogic told the Committee that it has seen some ‘extraordinary figures on the housing market through the current cycle…in the 12 months to the end of October [2021] national dwellings values have increased 21.6 per cent, which is the highest annual growth rate since June 1989.’11
Australian regional centres are seeing significant spikes in their housing markets too, with property prices having increased by 24 per cent over the past year, indeed more than capital cities which experienced a 21 per cent increase.12 The effects of this regional boom are real and widespread. Mr Louis Christopher, Managing Director of SQM Research, commented:
We're at serious risk of creating a homelessness issue in our regions, because the prices have snapped up, there is no supply coming through immediately…I do think we are at risk of creating an increase in homelessness if we do not address our long-term issues surrounding supply and having a tactical response towards supply.13
In its submission the Reserve Bank of Australia (RBA) confirmed that housing accessibility and housing affordability ‘have changed significantly in Australia over the past decade, with the extent of those changes varying across different groups and regions within the country.’14

Government responsibility for housing

Responsibility for housing in Australia appears to be complex, sitting across three levels of government, with some overlap in responsibilities as well. At a high level, local, and state and territory governments are generally responsible for areas of land release, planning, zoning and facilitating the delivery of housing services, while the Australian Government is also responsible for some aspects of delivery and funding of housing services and assistance.
The Committee invited all tiers of government to provide evidence to this inquiry, but written and oral representation varied and there was no attendance at public hearings by state and territory governments, except for the Queensland Government.
There is no doubt that there is a gap in government coordination and an overwhelming call for all levels of government to be better aligned and coordinated on all aspects of housing in Australia. As Digital Finance Analytics stated:
The housing affordability issue is a complex and politically charged one, with a convenient separation of accountabilities between States (mainly supply-side issues such as land release, planning and zoning and building standards) and Federal where initiatives such as Homebuilder, and additional first-time buyer incentives have featured alongside the tax settings. There is in fact little joined-up thinking.15
Ms Sarah Nelson, a housing and homelessness advocate, gave an honest, firsthand account of her experience of homelessness and the need for appropriate and affordable long-term housing. Ms Nelson specifically addressed a lack of government coordination, and the effect it has on individuals like herself:
Providing people with a home to live in isn't that complex. It's actually quite simple. What makes it complex, though, is the fact that this intersection of policies and responsibilities has resulted in, at best, a lack of coordination and, at worst, competing interests. If we were to take a bipartisan approach to resolving the issues and if each jurisdiction were to bring all of their areas of responsibility to the table, with a commitment from all to action, it would stand to reason that the complexities would diminish, the issues would be easier to solve and we could deliver a better future for all Australians. We're in a situation right now where, like me, the 3½ million households who are currently in housing stress, the disproportionate number of our First Nations people affected by housing issues and the 116,000 people experiencing homelessness, including 44,000 young people, all find themselves at this intersection. As things stand, we also have a generation of young Australians who, unlike their parents and grandparents, won't be able to achieve home ownership. They, too, are finding themselves at this intersection. Like me, every single one of these people has become collateral damage.16
Whether the housing affordability challenge in Australia is attributed to issues of supply, demand, taxation, planning, zoning, the cost of finance or the regulation thereof, or any other factors, there appears to be no doubt or disagreement that the challenge is real. Having a roof over your head has become harder to achieve for a larger group of people than ever before in Australia.

Australia’s home-owning democracy

Australia has long been a place where land and country has been deeply personal and an underpinning tenet of our identity. Traditional owners have long understood the importance of country, a principle that was echoed and implemented by Sir Robert Menzies and during his administration, Australia became the world’s greatest ‘home owning democracy’.17 This fundamental principle of Australia has been slowly eroded over the years and it is now important more than ever to rectify the mistakes of the past and forge a new path for the next generation.

Ownership approaches


The concept of ‘ownership’ has developed over time and several different approaches. The aristocratic approach is that property should be owned by a small elite.18 The collectivist-authoritarian (Marxist) approach is to ultimately have all control of property by the State. The liberal-democratic approach is for ownership and control to be by citizens.

Ownership in practice

Capital transformation

Through widespread home ownership, Australia was able to facilitate equality. No longer was it a question of class or inheritance, everyone was able to own their own ‘castle’; another great advance in Australia’s democracy. Home ownership allowed workers to stop consuming their wages on rent, and apply their capital into a home. The same then became equity that was relatively safe and secure, allowing Australians to become some of the wealthiest on earth.


As a result of this transformation of ‘wages’ into capital19, Australians were no longer just a ‘wage-earner’ but a ‘home owner’. This created a higher status than they would experience elsewhere.20

Greater prosperity / the ownership dividend

Mr Noel Skelton, Scotch MP, and originator of the phrase ‘property owning democracy’ showed that private property has an ethical dimension.21 Ownership brings ‘an increased sense of responsibility, a wider economic outlook, a practical medium for the expression of moral and intellectual qualities.’22 In today’s words, the property-owning democracy brings in entrepreneurs and new ventures, small to medium enterprise, and the ambitious. The property-owning democracy is a way to unlock the character, ambition, and intelligence of our people. The ownership dividend to society is that the more people are participating economically, the greater chance for innovative and enterprising characters to drive the economy to greater prosperity.
Overall, liberal democracy has contributed to a period of relative peace and prosperity.

How things have gone wrong

Between the 1940s and 1970s, Australia’s home ownership rate skyrocketed from below 50 per cent to above 70 per cent of Australians, but today, this number is now on a negative trajectory.23 With a decline in property ownership there is a possibility that Australia will lose an important part of its character as it becomes common to live under a landlord.
There is true reason for optimism. For example, we are blessed with huge amounts of land in Australia. Land is by far the most expensive component of homes and we have the highest level of land per citizen.24 We have also seen how other property owning democracies can grow, such as in Singapore.25 In the past four decades, Singapore’s proportion of home ownership amongst young adults (those aged between 25 to 34 years) has jumped from around 60 per cent to 88 per cent, whereas in Australia it has sunk from 60 per cent to 40 per cent for the same group.26 Singapore’s property-owning democracy has focused on supply, and is living testimony that the goal of a property-owning democracy is achievable between generations.27
We should also work towards the opportunity to build the types of homes fitting for a free people.28 Increasing supply is about increasing the type, quality and diversity of housing, allowing the people to choose how and where they shall live. Governments in the past have understood that housing affordability was achieved through a huge increase in the supply.29 For example, the housing programme for those who had, appropriately, been to war to fight for our freedom in World War Two.30 It was fitting that this program should be focused on our freedom creators as they helped further our liberal democracy and its freedom-loving spirit.

Conduct of the inquiry

On 4 August 2021 the House of Representatives Standing Committee on Tax and Revenue adopted an inquiry into Housing Affordability and Supply in Australia, referred by the Treasurer, the Hon Josh Frydenberg MP. The Committee was asked to inquire into and report on the contribution of tax and regulation on housing affordability and supply in Australia. A copy of the Terms of Reference can be found at page xiii.
On 16 August 2021, the Committee issued a media release announcing the inquiry and calling for submissions. The Committee invited submissions from federal, state and territory and local governments; industry groups and peak bodies; think tanks; academics and economists; unions; and the general public.
The Committee received 208 submissions and an additional 20 supplementary submissions. The full list of submissions and other additional information presented to the inquiry is at Appendix A. The 208 submissions included 52 form submissions regarding the ‘More than Mining’ proposed policy reform (discussed in Chapter 6), some of which contained tailored comments. While the Committee was unable to publish all the form submissions, four were published as examples. The Committee also received three exhibits, which are listed in Appendix B.
The Committee held eight public hearings. Due to COVID-19 travel restrictions, all public hearings were held via videoconference with witnesses from all over Australia.
Transcripts for all public hearings can be found on the Committee’s website, and details of the public hearings are listed at Appendix C.

Recent reports on Australian housing

The Committee acknowledges that there have been several inquiries into housing in Australia, in its various forms, over recent years. The Committee also notes that evidence provided to this inquiry has similarly been provided to some of the previous inquiries, and that there may be some submitter fatigue in the community.
Previous key reports into Australian housing include:
Final Report inquiry into homelessness in Australia, House of Representatives Standing Committee on Social Policy and Legal Affairs (July 2021)
Shelter in the storm - COVID-19 and homelessness - Interim report of the inquiry into homelessness in Australia, House of Representatives Standing Committee on Social Policy and Legal Affairs (October 2020)
Report on the inquiry into home ownership, House of Representatives Standing Committee on Economics (December 2016)
Out of reach? The Australian housing affordability challenge, Senate Standing Committee on Economics (May 2015)
A good house is hard to find: Housing affordability in Australia, Senate Select Committee on Housing Affordability in Australia (June 2008)
First Home Ownership: Productivity Commission Inquiry Report, Productivity Commission (March 2004).

Report structure

This report is structured into seven chapters, including this introduction. It is noted that the inquiry received some evidence specifically relating to social and affordable housing. The Committee notes that a higher volume of more targeted evidence on social and affordable housing from many of the same submitters to this inquiry was also received by the House of Representatives Standing Committee on Social Policy and Legal Affairs in its recent inquiry into homelessness in Australia.31 As the final report for that inquiry considered many issues relating to social and affordable housing and made relevant recommendations, to avoid duplication this report focuses on a few specific issues relating to social and affordable housing that are of particular interest to the Committee.
This report covers the following topics.
Chapter 2 discusses housing affordability issues in Australia, including the definition of housing affordability, COVID-19 effects on affordability and long-term trends, and why housing affordability matters.
Chapter 3 discusses the relationship between housing affordability and planning restrictions.
Chapter 4 considers specific issues relating to social and affordable housing, namely ‘rent-to-own’ housing models, shared equity schemes and the role of private investment.
Chapter 5 considers deposits for first home buyers.
Chapter 6 provides a brief overview of relevant taxes and charges and considers how these promote or impede housing affordability and supply.
Chapter 7 considers some other policies.


The Committee would like to thank everyone who provided written submissions and attended public hearings, albeit remotely.

  • 1
    Dr Emma Campbell, Chief Executive Officer, Australian Capital Territory (ACT) Council of Social Services, Committee Hansard, Canberra, 10 November 2021, p. 31.
  • 2
    Committee Hansard, Canberra, 17 November 2021, p. 38.
  • 3
    Melbourne Institute, 14th Annual Statistical Report of the HILDA [Household Income and Labour Dynamics in Australia] Survey, 2019, melbourneinstitute.unimelb.edu.au/hilda/publications/hilda-statistical-reports, viewed 2 March 2022; cited in Mr Saul Eslake, Principal, Corinna Economic Advisory, Committee Hansard, Canberra, 17 November 2021, p. 38.
  • 4
    Mr Eslake, Corinna Economic Advisory, Committee Hansard, Canberra, 17 November 2021, p. 38.
  • 5
    Mr Eslake, Submission 3, p. [3].
  • 6
    Mr Eslake, Corinna Economic Advisory, Committee Hansard, Canberra, 17 November 2021, p. 38.
  • 7
    Organisation for Economic Co-operation and Development (OECD), Housing, 2020, www.oecdbetterlifeindex.org/topics/housing/, viewed 8 December 2021.
  • 8
    OECD, Housing, 2020, www.oecdbetterlifeindex.org/topics/housing/, viewed 8 December 2021.
  • 9
    PowerHousing Australia, Submission 55, p. 4.
  • 10
    Committee Hansard, Canberra, 10 November 2021, p. 8.
  • 11
    Ms Eliza Owen, Head of Research, CoreLogic, Committee Hansard, Canberra, 17 November 2021, p. 1.
  • 12
    Ms Owen, CoreLogic, Committee Hansard, Canberra, 17 November 2021, p. 1.
  • 13
    Committee Hansard, Canberra, 17 November 2021, pages 2-3.
  • 14
    Reserve Bank of Australia (RBA), Submission 52, p. 4.
  • 15
    Digital Finance Analytics, Submission 95, p. 1.
  • 16
    Committee Hansard, Canberra, 3 November 2021, p. 2.
  • 17
    The Hon John Howard (then Prime Minister), ‘John Howard and shares’, ABC The World Today, 17 April 2000, www.abc.net.au/worldtoday/stories/s119384.htm, viewed 2 March 2022.
  • 18
    These were also often those only with an education, and who participated in elections.
  • 19
    Sometimes referred to as ‘equity’ in the financial sphere.
  • 20
    It also exposed as false the Marxist class-division of people into either one category as either ‘worker’ or ‘owner’, as people could be both at the same time.
  • 21
    N Skelton, ‘Appendix B’, Constructive conservatism: Architect or caretaker: the New Era: Problem and principle: Democracy stabilised, N Skelton and S. K. G. Feiling, W. Blackwood, 1924, p. 236.
  • 22
    N Skelton, ‘Appendix B’, Constructive conservatism: Architect or caretaker: the New Era: Problem and principle: Democracy stabilised, N Skelton and S. K. G. Feiling, W. Blackwood, 1924, p. 239.
  • 23
    M Corcoran, ‘Australian housing nothing like Menzies era but budget a good start’, Australian Financial Review, 10 May 2017, www.afr.com/property/australian-housing-nothing-like-menzies-era-but-budget-a-good-start-20170510-gw1idx, viewed 2 March 2022.
  • 24
    This land statistic is in both in ‘aggregate’ terms and ‘arable’ terms; CIA World Factbook, Explore all countries – Australia, 17 February 2022, www.cia.gov/the-world-factbook/countries/australia/, viewed 2 March 2022. Houses, in fact have two parts: the material building of a house, and land upon which it rests. We can once again make sure the resources of Australia are priced and accessible for purchase. So then we can continue for us to be the most prosperous liberal property-owning democracy in the world.
  • 25
    Lee Kuan Yew describes his nation in this terms: ‘We have created a property-owning democracy, that's why we have stability in Singapore’; cited in W Outhwaite and S Turner (eds), The SAGE Handbook of Political Sociology, 2v, Sage, 2017.
  • 26
    Dr Cameron Murray, ‘The Singapore-inspired idea for using super for housing that could cut costs 50%’, The Conversation, 17 January 2022, theconversation.com/the-singapore-inspired-idea-for-using-super-for-housing-that-could-cut-costs-50-174401, viewed 2 March 2022.
  • 27
    This is despite the small amount of land in Singapore, on which grounds they said it necessitated some government intervention - the use of 99-year leasehold instead of freehold. There is therefore a threat of some government rule over life. This creates the possibility of only a partial property-owning democracy. Fortunately, we in Australia can go even further with freehold.
  • 28
    Sir Robert Menzies spoke of a ‘house and garden’; cited in J R Nethercote, ‘Seventy-five years later, we still remember Menzies’ “forgotten people” speeches’, 19 May 2017, www.smh.com.au/opinion/seventyfive-years-later-we-still-remember-menzies-forgotten-people-speeches-20170519-gw8qu5, viewed 2 March 2022.
  • 29
    Sir Robert Menzies in his 1961 election speech stated: ‘Though the problem of housing, whether by governments or private citizens, is, under the constitutional distribution of powers, primarily one for the States (except in Commonwealth Territories), my own Government can present a remarkable record of voluntary performance, a record which we would wish to add to in the next Parliament, working, as always, in co-operation with State Governments, who are fully conscious of the needs.
    Since 1950, 907,000 houses and flats have been constructed in Australia, most of them being for ownership. Towards this remarkable total, which will more than stand comparison with any other country, the Commonwealth has found no less than £780m.! In War Service Homes alone, which are our special and honourable responsibility, we have found £350 million, which you may care to compare with a total of £53 million over the previous thirty years of the Scheme, which began in 1919.’
    R Menzies, ‘Robert Menzies 1961’, Museum of Australian Democracy at Old Parliament House, 15 November 1961, electionspeeches.moadoph.gov.au/speeches/1961-robert-menzies, viewed 2 March 2022.
  • 30
    R Menzies, ‘Robert Menzies 1961’, Museum of Australian Democracy at Old Parliament House, 15 November 1961, electionspeeches.moadoph.gov.au/speeches/1961-robert-menzies, viewed 2 March 2022.
  • 31
    House of Representatives Standing Committee on Social Policy and Legal Affairs, Final Report – Inquiry into Homelessness, July 2021, Canberra.

 |  Contents  |