Page 10 - Wealth-Adviser-Issue-113 (FWP)

ISSUE 108
MARCH 2025

young people are locked out of the housing market, they are the need for greater flexibility in zoning laws to allow for
less likely to start families, invest in their communities, or higher-density development in well-located areas (Grattan
contribute to long-term economic growth. Institute, 2023). This would help to address the mismatch
The social consequences of the housing crisis are also between where people want to live and where housing is
evident in the rise of homelessness and housing insecurity. available. For example, allowing more medium-density
According to the Australian Institute of Health and Welfare housing in inner-city suburbs could make better use of exist-
(AIHW), the number of people experiencing homelessness ing infrastructure and reduce urban sprawl.
has increased in recent years, with women over 55 and
Indigenous Australians particularly affected (AIHW, 2023). Investment in Public and Social Housing
This is not just a personal tragedy; it is a failure of the social Increasing investment in public and social housing is es-
contract and a threat to the cohesion of Australian society. sential to provide options for those who are priced out of the
The crisis also has implications for mental health and private market. The Australian Housing and Urban Research
wellbeing. The stress of housing insecurity, the fear of evic- Institute (AHURI) has called for a significant increase in
tion, and the struggle to make ends meet can take a heavy funding for social housing, arguing that this is a key part of
toll on individuals and families. Research from the Australian the solution to the crisis (AHURI, 2023). Social housing not
Housing and Urban Research Institute (AHURI) shows that only provides affordable homes for those in need but also
housing stress is linked to poorer mental health outcomes, helps to stabilise the broader housing market by reducing
especially for children and young people (AHURI, 2023). demand pressure on the private rental sector.
In summary, the housing crisis is not just about econom-
ics—it is about fairness, opportunity, and the kind of society Sustainable Population Policy
Australia wants to be. Addressing the crisis requires not only A sustainable population policy is another key element.
practical policy solutions but also a renewed commitment to The Firstlinks article, “9 Ways to Fix Australia’s Housing
social justice and equality. Crisis,” argues: “A comprehensive population plan is needed
to link migration with housing, infrastructure, and employ-
Practical Solutions: Policy, Planning, ment opportunities.” This means ensuring that population
4 and Investment growth is managed in a way that is consistent with the
Addressing the housing crisis requires a multi-faceted capacity of the housing market and the broader economy.
approach that tackles both demand and supply-side factors. Slowing the rate of population growth, at least in the short
The Sustainable Population Australia briefing note is clear: term, could help to ease pressure on the housing market and
“The solution to the housing crisis is multi-faceted. It must give supply a chance to catch up with demand.
include a combination of tax reform, regulation, investment
in public housing and a sustainable population policy that Bipartisan Cooperation and Long-Term Planning
will contribute to demand management.” This comprehen- Bipartisan cooperation and long-term planning are also
sive approach is essential to ensure that all Australians have essential. The housing crisis is a complex and long-term
access to affordable and secure housing. challenge that requires sustained commitment from all
levels of government. The Firstlinks article, “9 Ways to Fix
Tax Reform Australia’s Housing Crisis,” notes: “A bipartisan national
Tax reform is a critical component of any solution. housing policy is needed to address both supply and de-
Reforming negative gearing and capital gains tax conces- mand, including immigration policy.” This kind of coopera-
sions could help to reduce speculative investment and tion is rare in Australian politics, but it is essential if we are
make housing more affordable for first-home buyers. These to make real progress.
policies have been criticised for distorting the market and
encouraging investors to bid up prices, making it harder Practical Strategies for Advisers and Homeowners
for ordinary Australians to enter the market. The Grattan For advisers and homeowners, there are practical
Institute has called for the removal of negative gearing and strategies to consider. Diversifying investments, exploring
a reduction in capital gains tax discounts, arguing that these alternative housing models (such as co-housing or build-to-
reforms would level the playing field for first-home buyers rent), and staying informed about policy changes can help
and reduce housing price inflation (Grattan Institute, 2023). individuals to navigate the current market and protect their
financial interests. Advisers can play a key role in helping
Planning and Zoning Reforms clients understand the risks and opportunities in the hous-
Planning and zoning reforms are also needed to unlock ing market and in developing strategies to build resilience in
more housing supply. The Grattan Institute has highlighted the face of uncertainty.

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