‘The Aussie Housing Affordability Crisis: An Honest Debate’

Click here to read ‘The Aussie Housing Affordability Crisis: An Honest Debate’

“Sixty-four pages, eighteen graphs and bar charts (many not seen before), crammed with practical, sensible information.  It tells the story of the housing affordability crisis at it is.” – Dick Smith

It would be fair to expect that as our society moves ahead that it becomes better off.

That is, things become more affordable and easier to purchase.

It’s obvious that cars, TV sets, and travel are more affordable now than they’ve ever been. However, there is one standout where things are reversed – housing affordability.

Something has definitely gone wrong here and it’s creating lasting economic and social divisions in Australia.

Pip and I were able to buy a house in Sydney for $32,000 in the 1970s.

Because it was a reasonable price relative to our incomes at the time, we were able to put more money into expanding Dick Smith Electronics, and employ lots of people.

If we tried to do the same thing today, virtually all of our money would have to go into paying off our house; the business may never have been started.

Think about all the Australian entrepreneurs that we may never hear of because this housing crisis is holding them back. What a tragedy for our country.

The housing affordability crisis is an issue that currently dominates our public debate – and for good reason. Shelter is a basic need, and our housing sector is of central importance to both the financial welfare of individual Australians, and the robustness of our whole economy. Sadly, though, it’s a debate that is weighed down on all sides by misinformation, vested interests, political timidity, and ideological blinkers.

I have nothing to gain or lose from the housing affordability crisis – I sold Dick Smith Electronics in the 1980s, and I don’t own any property that I’ve leased to someone else to live in.

I’m not scared to say what the economists, the politicians, and the media won’t tell you. I just want Australians to hear the full story from someone they can trust.

In these pages, I will show how Australia has shifted from viewing homes as a place for a family to live in with security, to seeing it as a tax-advantaged investment opportunity, how this has caused home ownership to become up to eight times less affordable that it was in the past, and why this has negative implications for the whole of Australia.

I will show how a dramatically increasing population, a tax regime that unfairly subsidises the wealthy, and overseas investors are the key drivers of this crisis.

I will also canvas what we could do to fix it all if we really wanted to, and put the spotlight on those vested interests that will try to get in the way of any government taking the meaningful action we need to give young Australians a Fair Go.

An informed people is the first step to making change, so I hope that you find this useful in understanding a complex and serious issue for our country.

Dick Smith


  1. Read your excellent report Dick, and can’t agree more. Occasionally when I have a thought I will jot it down, as many others no doubt do as well. Whilst a couple of my offerings below don’t go close to the detailed reasoning you have put forward, we are obviously on the same page.

    Just my two bobs worth on all this hoo-ha lately from politicians crying crocodile tears about the affordability of housing. While the average young couple are finding it increasingly difficult to compete in the housing market, our politicians and vested interests are doing their very best to ensure the longevity of the three main causes.

    1) Immigration; You can’t artificially increase the population by large volumes and not have housing, infrastructure, resource and services issues. All governments in this country are broke and have borrowed to the hilt trying to keep up, but it’s become like a cat chasing its tail. We need to put a stop on immigration and cease this senseless grab for resources and profits by those who are making a killing in the housing and commercial sectors. Immigration served us well in the medium term post war, but it’s done to death of late and must be wound back drastically.

    2) Foreign investment in all housing; It makes no sense forcing our young home seekers to compete with overseas investors, no matter what type of dwelling, only to see them miss out due to the weight of foreign money. Then to add insult to injury, we often hear how these dwellings will sit unoccupied as foreign owners wait for a creep in values, then they sell and the cycle starts again, putting our young people further behind. If the millionaires living on harbour foreshores, waterways or prime high ground around the country want to cry about a shortage of local buyers, let them lower their expectations.

    3) Negative gearing; There is no dodgy argument that can justify giving an advantage to anyone wanting to invest in a rental, over those seeking to buy a home to live in. Everyone over the age of 18 should be given the opportunity of a once only tax deductible house purchase in their lifetime, irrespective of how it will be used. If mums and dads want to invest further in the housing market, let them do it off their own bat without assistance. A system of this kind would no doubt encourage parents with extra cash to set their kids up, but in full knowledge that such a move would use up that child’s one and only lifetime entitlement. Totally unlike what happens now where some parents with clever accountants are able to set their kids up with no penalty, then continue to accumulate and add to their portfolio, which ironically is propped up by taxpayers living in rentals. The system is stuffed.

    Yeah, demand is the key. There will always be demand that drives the cost of housing and everything else, but we have been stupid enough to include all comers in our domestic housing market, it just helps drive demand further.

    Why would we allow the likes of foreign investors to compete in our domestic housing market when they have absolutely no intention of living in the dwelling they buy? Are we so brain dead that we appear to be totally unable to develop other industries in this country, and as such are more and more reliant on foreign money to drive jobs in a housing industry that history says will eventually implode?

    With our fearless leaders blindly following a migration program that should be drastically downgraded, as well as this nonsense of negative gearing the costs of owning a rental against other income, it’s simply pushing the cost of housing and rents higher and higher.

    The reason why this failed thinking will be allowed to perpetuate, of course, is because too many ordinary folk are getting fat riding the gravy train, while an ever increasing number of those unfortunate enough to be on lower incomes are condemned to a lifetime of high rents and never owning their own home.

  2. The Australian government has been mislead by the super wealthy into believing the more wealthy people a country has the better off all are, but this was a ploy to make the wealthy even richer by allowing them to import from poor countries that pay low wages. Of course you don’t have to be Einstein to realize that to have money to spend you need a job.
    This plan worked well for the super rich until they exhausted the wealth of Australia, it is then that they supported immigration and, superannuation and labor in a way because now with the government supporting the poor and the super rich owning the companies needed to provide the goods they were able to suck the federal government dry, and now we have the biggest national debt ever. Australians are the most in debt people of the world and our government is in more debt than ever before whilst the super rich have made more money than ever before in history. There is real pain coming and to stick your head in the sand will only make the impact worse, because war is not about helping people it is about resetting the financial markets because you no longer worry about your nice car, boat house so much as making to the next day, war also allows the super rich to become even wealthier as they take back what they loaned you money to buy from them. Less people in the world is the only answer to nearly all problems. Eg: When Australia was first settled the government gave each family 40acreas and this meant that every waking moment was spent trying to produce enough food to survive and life was hard, many went broke or died and so a neighbor bought the land until he had enough to live comfortably and enough to sell, this is when community evolved and so we had a town with doctors, school teachers, hardware stores etc and so life developed but when a single person has the wealth to own 2.million acre’s they no longer need a town or community as they just fly people in, round up and truck the cattle to the coast and ship overseas making fortunes with out the need for community.

  3. I strongly believe, as a 4th. generation Australian that the Immigration debate as well as the issue of housing affordability is coupled with the lack of accountability of the Federal Government’s policy of allowing non – Naturalized Australia’s to purchase LAND for the so called economic good of Australia.
    The A.S.E.A.N. ( S.E.Asian League of Nations ) – countries in the “Asia Pacific Rim” prohibit anyone but Nationals of their own countries purchasing land.
    Further, Nationals of other countries do not hold title over S.E.Asian land, however their spouse, a Naturalized Citizen of that country can do so.
    Why is it then okay for Foreign Nationals of other countries to ‘purchase out right’ and hold title over Australian Land ?
    Also, in S.E. Asia, a foreign natioal can LEASE Land in 3 incremental time periods, accounting to approximately 85 yrs. whereby “the land occupation” reverts back to the Country’s National land title holder. Why then, do we not have similar laws prohibiting, other than Australian Nationals ( 3 generation domiciled in Australia ), from Owning Australian LAND. ?

  4. Dr. Shannon Turnbull is completely right about Housing non affordability for young Australians. It is not the house prices but LAND prices that are the differential here ! When my wife an I were saving for a house in the early 70’s the average land price was 1/4 the cost of the actual house ! Now, land can easily be 2 to 3 times the cost of say a $150 – $180 K. house. So the ratio of land to house cost has skewed enormously over the years. This is a clear failure of Federal, State and Local Governances to supply enough land to keep land prices down. Clearly this issue is in the best interest of the States as they and the Federal Government over the ages ( 1980’s to 2017 ) maintain Land Price Premiums for tax and revenue purposes.

  5. Two other factors need addressing too. The local council obligations add to costs of housing, such as heritage agreements, styles associated with zonings. The other biggy in all this is the feminist factor…..no fault divorce which turns the efforts of buying a house into a diaspora of money into various hands. Anyway that’s just two I can think of in my limited time.

  6. Dick Smith for PM!

  7. Great report and makes sense. Unfortunately nothing will change while greed and corruption exert influence over human beings. Its sad to see ‘Paradise Lost’

  8. To Dick Smith

    Hi Dick, I’ve just read the whole report and all I can say is “Well done, finally from amongst all the garbage out there, a breath of fresh air”

    This whole issue isn’t about racism, it’s about our kids having a chance. I’ve been on about rising unaffordability of housing for years but a lot of people just don’t see it until their kids don’t leave home. This whole debt/immigration ponzi is totally unsustainable. You’re dead right about our kids spending the best part of their life’s income to buy a house, if they’re that lucky. For a long time I’ve lamented “shelter” being used as a class of investment. It’s great to know lots of other people think the same, I read some of the comments on articles and video clips regarding your “Fair Go” campaign and there seems to be a huge voice out there that needs to be heard.

    Thank you for speaking out about this.


  9. It is not housing that has become unaffordable so much as the land that has become unaffordable. Land in Sydney can be well over half the cost of building a house. Eliminating the cost of land can more than half the cost of new housing!

    This was achieved in the UK by forming a Real Estate Investment Trust (REIT) that became listed on the London Stock Exchange in 1903 as First Garden City Limited . FGCL acquired and developed 15 square Kilometers of land 35 miles North of London to build the new town of Letchworth. As the land was self-financing its cost was eliminated for developers of rental properties, offices, factories and supermarkets and for all other uses. This created a magnet to establish new investment and new business activities.

    Modern financial instruments can greatly improve the Letchworth model. These are described in my article published earlier this year and presented to the World Ecocity Summit in Melbourne last month. Refer to: ‘Democratising the wealth of cities: Self-financing urban development’, Environment and Urbanisation, 29(1): 237-250, April, 2017, DOI: 10.1177/0956247816685985. Published online March 24, abstract and link at: .

  10. Your not wrong its a crime to be an australian ,im not racist but …heres the thing other people are racist to me … example ive worked in same job for 31 years and the company i work for is hell bent on employing new imigrants not aussies ..if thats not bad enough a newly appointed boss told me in front of all my work colleges that he didnt want me doing my job i werent experienced enough ??wtf so he puts an agency person on my job ?? The person was same nationality as him ? Hmmm and the person had no experience ..and im an aussie and if i say any thing im racist ? Its a joke …a real joke ..

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