The anecdotes are endless. A 50-strong queue of hopeful renters outside a tumble-down house. The rising number of people sleeping rough on Melbourne streets. Adults in their 30s moving in with their parents in their quest to save a house deposit. And who can forget Millennials being scolded for giving up on the Great Australian Dream and spending their money on smashed avocado instead?
Economics can generate some polarising debates, but for once the experts agree: a crisis of housing affordability has engulfed Melbourne and other capital cities, while leaving regional areas relatively immune.
According to the Grattan Institute, a “perfect storm” of rising incomes and falling interest rates, migration, tax and welfare settings that feed demand, and planning rules restricting supply has seen house prices rise 50 per cent in Melbourne since 2012. Housing affordability stress is estimated to affect one in nine households. Home ownership rates are dropping as prices soar. Fewer Australians of all ages own their home outright than they did in the past.
‘We call it the culture of living closer together.’
Sure, those without a lucky toehold on the city market have just experienced a once-in-a-lifetime gain. But for the rest of us the challenge of getting into the housing market, or even finding an affordable rental, has resulted in a range of innovative housing solutions that don’t involve relocating to remote or regional Australia (as suggested by Barnaby Joyce when he was deputy prime minister).