Australia’s housing crisis has again become a key election talking point, particularly for the coalition, which is blaming the Albanese government for the problem.
Peter Dutton has repeatedly claimed Labor has “created” a housing crisis, specifically arguing that higher migration rates over the past two years raised housing demand.
“The government’s brought in a million people, all of whom want homes, and all of whom are competing against young Australians for that rental property or to purchase a home,” he said in the second leaders’ debate on April 16, 2025 (timestamp seven minutes eleven seconds).
“… the demand that the prime minister has generated has really created a housing crisis.”
Mr Dutton also said the election is focused on who can fix the housing crisis “that the government’s created” (13:50).
Mr Albanese hit back, describing the idea the housing crisis developed in the past two years as “nonsense.”
So, who’s right?
AAP FactCheck asked Mr Dutton what he means when he says “housing crisis” and for evidence that Labor created this housing crisis, but his office did not respond.
Experts say there is a housing crisis in Australia, and it can be defined by a series of statistical indicators spanning several decades since 2000.
Indicators include: a widening gap between income growth and property prices; a shortfall in housing construction relative to demand; and a sharp decline in homeownership rates.
Mr Dutton has repeatedly tied higher migration in recent years to the creation of a housing crisis under Labor, arguing migrants have caused demand for housing to increase sharply.
However, University of Adelaide housing expert Emma Baker said the evidence clearly shows the supply shortfall predates higher migration levels after pandemic travel restrictions were lifted.
“There was already a massive supply problem,” Professor Baker told AAP FactCheck.
“It’s a naughty argument to make – it’s quite obviously not true.”
Migration experts have previously told AAP FactCheck inbound migration rates are relatively flat when accounting for the sharp fall and subsequent rebound around the pandemic.
They also said the extent of migration increases is largely a result of fewer temporary migrants departing, in significant part due to both Labor and coalition policies.
The Australian Bureau of Statistics estimates the population is currently smaller than predicted in the 2018 forecast.
Professor Baker said migration isn’t the only factor affecting housing demand, and that a longer-term decline in household size across Australia is also a key contributor.
The National Housing Supply and Affordability Council’s State of the Housing System 2024 reportshows the average household size (AHS) fell from more than three people per dwelling in the 1970s to about 2.5 in 2021.
“If the AHS was still 3.3 per household, the population would occupy almost 25 per cent fewer dwellings,” the report said (page 42).
Michael Fotheringham, managing director of the Australian Housing and Urban Research Institute, said Australia’s housing crisis persisted when migration halted during the pandemic.
“House prices did not collapse,” Dr Fotheringham told AAP FactCheck.
“In fact, they continued to go up.”
Hal Pawson, a housing research and policy expert at the University of NSW, said rent costs have accelerated in recent years, partly due to migration since pandemic travel restrictions were lifted.
“The migration policy settings that permitted that bounce back were those already in place when Labor came into office,” Professor Pawson told AAP FactCheck.
“In fact, it was partly due to policy changes enacted under the Morrison government, in its last few months in power, that this bounce back was so extreme.”
WHAT DEFINES THE HOUSING CRISIS?
When defining Australia’s housing crisis, experts pointed to a range of statistical indicators in each case, agreeing the problem is longstanding, stretching back several decades.
Dr Fotheringham said the idea the crisis was created under the Albanese government is “absolute rot”.
Over the past four decades, house prices have “grown enormously” while wages have risen “much less”, he said.
The number of years’ worth of average full-time earnings required to afford a median home has blown out over the past 40 years, according to research from consultancy firm McCrindle.
Median property prices across capital cities ranged between 2.1 and five times annual earnings in 1981.
By 2021, that ratio had skyrocketed to between four and 14.3 times earnings.
“This is a crisis that’s been 40 years in the making,” Dr Fotheringham said.
“This is not something that’s moved in the last couple of years – it’s utterly untrue.”
Prof Baker said another statistical indicator of the crisis is the shortfall in housing supply.
Data reported by the Reserve Bank of Australia shows housing construction has routinely fallen behind estimates of underlying demand growth over the past two decades.
“It’s probably as bad as it’s ever been, but it’s no surprise – it’s been brewing up for 20-odd years,” Prof Baker said.
“It’s clearly not just emerged in the last couple of years,” she added, explaining that its primary cause is “a failure to see it as a problem for a long time”.
Prof Pawson said there’s been a divergence between house prices and incomes for more than two decades.
“The claim that current ‘housing crisis’ conditions represent a new situation caused by actions of the current government is at variance with the facts,” he said.
Trivess Moore, a housing and construction expert at RMIT University, said the crisis had been building for decades and that policies had repeatedly failed to address it.
“The evidence certainly suggests that the housing affordability issues have been around for longer than since the last election,” Associate Professor Moore told AAP FactCheck.
Experts say homeownership rates are another statistical indicator of worsening housing affordability.
Australian Institute of Health and Welfare data shows Australians born between 1982 and 1991 have far lower homeownership rates than previous generations.
Fewer than half of 30 to 34-year-olds in 2021 were homeowners for the first time on record, compared to more than two thirds of those born between 1947 and 1951 at the same age.
Prof Pawson explained that several measures of housing affordability have worsened over the past three years, including the proportion of an income required to pay a mortgage bill.
This has coincided with increasing interest rates, which began in 2022 as inflation rose.
Additionally, the proportion of income required to pay rent has also risen sharply over Labor’s term in government, but that continues a trend that began in 2020 under the coalition.
“[It is] a stretch to argue that the recent rents spike was ‘created’ by actions of the current government,” Prof Pawson said.
“Indeed, when they tried to take actions to counter it in 2024 – via international student caps – this was blocked by the coalition.”