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Why life in Australia has become 'impossible' - and the moment that changed our country forever READ MORE: Will Aussie house prices fall in 2025? By BRETT LACKEY FOR DAILY MAIL AUSTRALIA Published: 03:41, 13 December 2024 | Updated: 03:42, 13 December 2024 e-mail View comments A video explainer on how life in Australia has become financially impossible has gone viral, with viewers pointing out the problem is appearing all over the globe. The video from Dutch YouTube channel Hindsight published on November 30 said soaring housing prices have made home ownership unattainable for younger people and threatened to cement an ongoing generational wealth divide in the nation. 'The Australian dream is about owning a house, but that ideal is now increasingly getting out of reach,' the caption to the video reads.
The narrator in the video explains that despite Australia's massive size, roughly the same as the US minus Alaska , almost the entire population lives in just five capital cities, with about 40 per cent in Sydney and Melbourne alone. 'The Australian dream is dying,' they said. According to a 2024 Demographia report, Sydney, Melbourne and Adelaide are among the 10 most unaffordable cities in the world, with the tiny island city of Hong Kong topping the list.
'The median cost of a house doubled [in Australia] from under $500,000 in 2011 to nearly $1million in 2024. And wages didn't keep up,' the narrator explained. They also referenced figures backed up by the latest ANZ Corelogic Housing Affordability Report, which showed that house prices in Sydney now cost ten times the median salary.
The median house price in Australia is nearly ten times the average salary 'So more people are looking to rent and this demand is one of the reasons rents are now spinning out of control, placing the Australian dream of buying a house even further out of reach.' The video explains that a minimum-wage worker must spend 68 per cent of their income on rent, which 'makes it impossible to save up' for a deposit. 'This increases the number of people that will always rent while homeowners are becoming incredibly wealthy.
The fear is that this can create a two class society.' The video argues the increasingly competitive rental market has been fuelled by more people moving to Australia. 'Australia in the past two years let in a record number of immigrants.
Critics argue this was irresponsible because it coincided with extreme difficulties in the construction sector,' the video explained. The country is currently challenged with soaring costs for new building projects right as they are needed most with inflation combining with labour and supply chain costs to push up the price of building a new home by nearly 40 per cent. 'Immigration can help Australia fill gaps in its labor force, and in the form of international students, it's generating billions in revenue each year.
'In fact, education is the largest non-mineral export of Australia. But it also adds to already mounting domestic pressures.' In the video, one woman complained about soaring immigration as Australia battled a housing crisis Commenters on the video agreed it was a huge problem not just in Australia but in other countries.
'When I was a kid in Australia, a person on one wage was able to pay off a house, live comfortably and take the family on holidays. Now it takes at least two wages and that's not even enough,' one commenter said. 'Dear Australia, we have the same problem.
Signed Canada,' a second added. 'Anyone else notice this exact same story (with slight variations) is occurring with seemingly every county in the world right now?' added a third. The video points out that in the 1950s, Australia's economy was growing rapidly, and the nation had some of the best living standards in the world.
'This is when the Great Australian Dream was popularised. The ideal became to own a detached house on a quarter acre block in the suburbs with a garden and a Holden, the true Australian car. 'This led Australian cities to spread out.
Today, Melbourne is six times larger than London, but with fewer inhabitants. 'Sydney is even more extreme. It is 14 times larger than Berlin but with only 2million more inhabitants.
'The government stimulated home ownership with policies like the first home owner grant and home ownership jumped from 52 per cent in 1950 to a peak of 71 per cent in 1968. 'This happened in other countries as well but Australia was top of the class.' The Australian dream of a house with a large backyard is now out of reach for many The filmmakers said Australia's housing issues started in the 1980s when there was a shift in priorities, and housing went from being viewed as a fundamental human right to an asset for investment and profit.
'The government incentivised people to buy a second home and to put this on the market to rent. This increased the number of investors on the market, increased demand, and thus raised prices.' This shift in the perception of housing as a commodity steadily increased prices until it reached a fever pitch when interest rates were lowered to nearly zero as the Covid pandemic struck in 2020.
'These extremely low rates made it easier for people to get a loan for a house, increased demand, and raised prices. On top of this, the government spent billions of dollars on programs intended to help low and middle income families to buy their first house.' The filmmakers said it was one of many factors that led to more demand and that wouldn't be a problem 'if it was properly balanced by more supply, but that's one of the things that went wrong'.
The filmmakers argue in the 1980s there was a shift in priorities in which housing went from being viewed as a fundamental human right to an asset for investment and profit They argue a drop in the construction of government sponsored housing for low income earners along with an increase in red tape for new housing and a resistance to high density developments where they are needed all led to supply drying up. 'Most people want more housing, but 'not in our backyard' is the resounding chorus.' The video concludes with a powerful message by pointing to various solutions proposed by economists to fix the housing crisis.
These include easing planning restrictions, providing more public housing, tightening investor tax breaks and reforming how states collect taxes on housing. 'It is now up to politicians to convince Australians on how to address this issue..
. but there is at least some consensus amongst economists.' Adelaide Sydney Alaska Melbourne Share or comment on this article: Why life in Australia has become 'impossible' - and the moment that changed our country forever e-mail Add comment.
