Page 5 - FWP Wealth Adviser Newsletter - May 2025

ISSUE 111
MAY 2025

SHELTER,

SECURITY, AND

THE AUSTRALIAN

DREAM

UNPACKING THE

HOUSING CRISIS

AND PATHS TO

RESILIENCE
depositphotos.com

BY WEALTH ADVISER Diagnosing the Crisis: Supply, Demand, and
Systemic Barriers
Introduction: The Australian Dream in Crisis The housing crisis is not the product of a single factor,
For generations, the “Australian Dream” has been synon- but rather the result of a complex interplay between sup-
ymous with home ownership-a symbol of stability, personal ply-side constraints and demand-side pressures.
achievement, and intergenerational security. Yet, in 2025,
this dream is under threat as Australia faces a housing crisis Supply-Side Challenges:
of unprecedented scale and complexity. The sharp decline Australia’s capacity to deliver new housing has been
in new dwelling approvals, combined with soaring demand, severely hampered by regulatory bottlenecks, escalating
has left many Australians struggling to secure affordable, construction costs, and a wave of insolvencies in the build-
stable housing. As Firstlinks reports, “Australia’s housing ing sector. As Firstlinks notes, “Approvals per capita have
supply crisis is deepening as approvals per capita have fallen dropped 40% over the past decade, and construction costs
40% over the past decade”. This shortfall is compounded have soared”. The MacroBusiness analysis underscores the
by record immigration and a construction sector in turmoil, severity: “Record construction bankruptcies are worsening
with “new housing completions remain[ing] historically the housing shortage”. These bankruptcies, driven by rising
low”. material costs and labour shortages, have led to project
The consequences are stark: rental affordability has delays and cancellations, further constraining the pipeline
reached crisis levels, with “only 0.1% of rental properties of new homes.
affordable for people on welfare”. This article examines the
root causes of the crisis, its profound social and economic Demand-Side Pressures:
impacts, and the strategies-both individual and collec- At the same time, Australia’s population has grown
tive-that can help Australians build resilience and reclaim rapidly, fuelled by record levels of immigration. “Australia’s
the promise of shelter and security. population has surged due to record immigration, but new

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