Page 6 - FWP Wealth Adviser Newsletter - May 2025

ISSUE 111
MAY 2025

housing completions remain historically low”. Investor Health and Welfare, homelessness rates have risen steadily,
incentives such as negative gearing and capital gains tax with more than 116,000 Australians experiencing homeless-
discounts have intensified competition for limited stock, ness on any given night. The stress of insecure housing can
pushing prices and rents higher. exacerbate mental health issues and limit opportunities for
education and employment.
Policy and Political Debate:
Despite the crisis, policy responses have been fragment- Resilience and Adaptation: Strategies for
ed. As SBS News observes, “Both major parties have made Households and Communities
housing a central issue in their 2025 election campaigns,” While systemic reform is essential, individuals and com-
yet neither has addressed the underlying structural issues. munities are also finding ways to adapt and build resilience
The Liberal Party’s focus on accelerated approvals and in the face of adversity.
reduced red tape is countered by Labor’s commitment to
build 100,000 homes for first-time buyers, but critics argue Navigating the Rental Market and Alternative Models:
these measures are insufficient. “Neither party is addressing With traditional pathways to home ownership increas-
the demand-side incentives or structural planning issues at ingly blocked, Australians are exploring new approaches.
the heart of the crisis”. Co-housing, shared equity schemes, and community land
trusts offer alternative routes to secure, affordable housing.
International Perspective: As BrokerNews notes, “Despite increased listings, rental
Compared to other OECD nations, Australia lags in new affordability has not improved for low-income Australians”,
housing supply per capita. Countries such as Canada and highlighting the need for innovative solutions.
Germany have adopted more flexible planning regimes and
invested heavily in social housing, offering potential lessons Financial Literacy and Wealth Preservation:
for Australian policymakers. In uncertain times, financial literacy becomes a critical
tool for resilience. Households are advised to diversify their
The Human Impact: Affordability, Inequality, investments, build emergency savings, and seek professional
and Social Wellbeing guidance to navigate volatile markets. The Grattan Institute
Behind the statistics are the lived experiences of millions recommends targeted support for renters and first-home
of Australians. For renters, first-home buyers, and those on buyers, including rent assistance and deposit guarantees.
low incomes, the crisis is deeply personal.
Community-Led Solutions:
Rental Affordability and Social Exclusion: Grassroots initiatives, such as community housing pro-
The 2025 Anglicare Rental Affordability Snapshot paints viders and not-for-profit developers, are playing a growing
a grim picture: “Only 0.1% of homes affordable for people role in delivering affordable homes. Academic research
on welfare in 2025”. Even for minimum wage earners, just underscores the benefits of community-led housing, includ-
0.7% of rentals are within reach. As BrokerNews highlights, ing stronger social networks and greater stability.
“Decades of policy favouring private investors, including
negative gearing and capital gains tax discounts, have fu- Policy Pathways and the Future of
elled speculation”, making it harder for ordinary Australians the Australian Dream
to compete. Addressing the housing crisis will require bold, coordi-
nated action across all levels of government.
Wealth Inequality and the Social Contract:
The housing crisis is widening the gap between those who Accelerating Supply and Reforming Planning:
own property and those who do not. As SBS News notes, “the There is broad consensus that increasing the supply of
erosion of the social contract” is evident as young Australians new homes is essential. This means streamlining planning
and renters find themselves locked out of the market. Home approvals, investing in infrastructure, and supporting
ownership, once a pathway to security, is increasingly out of the construction sector to weather economic shocks. As
reach, threatening intergenerational equity. Firstlinks argues, “State land use planning regimes and slow
development approvals are key barriers”.
Broader Social and Economic Consequences:
Housing stress is linked to a range of negative outcomes, Investing in Social and Affordable Housing:
including homelessness, poor mental health, and reduced A renewed commitment to social housing is critical.
economic mobility. According to the Australian Institute of International experience shows that large-scale investment

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