ZG #7 - Australia's Housing Crisis: Exposing the Collapse (Part 4/12)

The Great Australian Dream is dead—and it’s not coming back unless we take bold action.

In this explosive episode of The Finance Bible, Zeke Guenthroth exposes why home ownership has become a pipe dream for an entire generation. From the 1980s to 2025, housing prices have spiralled from 3.3x income to 11.2x nationally—and nearly 14x in Sydney—locking out everyday Australians and creating the most unaffordable property market in the world.

We break down the structural failures driving this crisis:

• Mass immigration outpacing supply
• Government policy favouring investors over first home buyers
• Zoning restrictions and red tape delaying critical land releases
• A construction sector buckling under labour shortages and insolvency
• How inflated prices are tied to Australia’s declining birth rate and collapsing family structure

Compare Australia with global players like Poland, Japan, the UAE, Canada, and the U.S. to see what we can learn—and what we're doing disastrously wrong.

Zeke doesn't just rant—he provides real solutions. From reforming immigration to rethinking first home grants, discover what must change to restore affordability and make owning a home possible again.

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Disclaimer:
The information provided in this podcast is general in nature and does not constitute personal financial advice. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. Asset Road Pty Ltd recommends you seek independent financial, legal, taxation or other advice as required. All investments carry risk. Past performance is not indicative of future results.

Chapters

• 0:00 The Australian Dream Slipping Away
• 1:35 Timeline: 1980-2025 Housing Affordability Crisis
• 7:15 Who's Driving Up Housing Prices
• 12:55 Supply Shortfall and Construction Challenges
• 18:35 Impact on Families and Birth Rates
• 22:19 Global Comparisons and Potential Solutions
• 26:45 Immigration, GDP and Policy Reform

Transcript

Zeke Guenthroth: 0:01

Back in the day, growing up, ask any mother, any father the Australian dream. What was it? Owning your own home, go to school, go to uni, get a job, buy a home, pay it off, she'll be right, you'll retire all sweet buddy, g'day, happy days. The dream's now becoming out of reach. It's not just bad luck, it's structural, it's broken and it's locking a generation out of the dream of home ownership. That great Australian dream is now exactly that a dream. In this episode, I'm going to break down why buying property has become impossible for most and who's quietly winning from the collapse.

Zeke Guenthroth: 0:53

Welcome back to another episode of the Finance Bible Podcast. You're joined with myself, Zeke, and your co-host, Oscar. But before we get into it, please note that nothing in this podcast should ever be considered as personal financial advice. But if that is what you are seeking, get in touch, let us know and we will hook you up with the correct professionals. Sit back, relax and enjoy the show. Let's get into it.

Zeke Guenthroth: 1:16

Imagine a young couple in Melbourne, both working full-time, saving every dollar, yet still priced out of a one-bedroom unit. This isn't just their story. It's the reality for millions of Australians. Today we're unpacking Australia's housing affordability crisis why prices have exploded, who's profiting and how it's reshaping society, from family life to birth rates and so on. We're going to dissect the causes of the housing crisis within Australia, focusing on government policy, immigration, zoning, declining household structures. Explore rapidly into how high immigration is actually masking our economic weakness and propping up growth through housing demand. Compare Australia to other countries like Poland, germany, japan, uae, canada, uk, us, and propose some bold structures to restore affordability and fairness within our country. We're going to trace the crisis from 1980 through to 2025, expose who is driving up the prices, analyze all the failures of supply and link this to everything, such as falling birth rates, broken families, divorce, fatherless homes, and compare Australia to global success stories and offer real solutions to fix this mess. So what we need to do is we need to kind of gather a timeline right. So back in 1980, the median house price was about 3.3 times the average household income, which back then, home ownership extremely affordable. It's only 3.3 times your, your wage, your household income. So you know, if you were earning 50 grand, you could pick up a house for about 160k. How good is that? Take me back to those days. Hey, in 1990 pretty stable. It only went up to 3.5. You know, there was good supply and demand, really really good balance. Immigration wasn't too chaotic, everything was kind of moving how it should. Everything was good.

Zeke Guenthroth: 3:09

In 2000, there was a bit of a jump. It went from 3.5 to 5.2, which was mostly driven by the 1999 capital gains discount. That was when they introduced the capital gains tax discount and people started to really start buying property because it was more attractive. Ultimately. And then 2010, we're really starting to move. Now the ratio hits 7.3 as investor demand and immigration began to surge. So we all know what was going on between 2000 and 2010. You had a lot of wars, you had 9-11, al-qaeda a whole bunch of different things going on and immigration began to surge. Investing began to surge and we ended up at a 7.3 ratio.

Zeke Guenthroth: 3:53

So if your household income was 100K, you were buying 730K property 2025, fast forward to now we are having a catastrophe. So 11.2 is now the median multiple. So if you own 100K in your household, you're buying property for 1.1 million. Yeah, that's just not affordable, is it? When you're going to get home loans and stuff, it's normally about a five to six times multiplier of your income, but Sydney is nearly at 14 times the median income. It's among the worst in the world. We're in the top five for the worst. I think soon enough we're going to be the actual number one worst, and we'll get into that a bit more later.

Zeke Guenthroth: 4:43

In the regional markets, from 2020 through to 2022, prices rose 20%, which completely eradicated affordability. That was during the COVID boom. We all witnessed and experienced that here. Some of us were lucky enough to make a fair bit of money on that. And there's now a generational divide as well. So homeownership for under 35s has fallen from 61% back in 1981 to 45% in 2021. Homeownership under 35s is drastically on the way down. It's dwindling, and what we found is actually a fair chunk of them were inherited as well the ones post-1981. So through to 2021, that 45% of homeowners under 35, a fair chunk of them have inherited those homes.

Zeke Guenthroth: 5:30

And what else is going on the rent? Let's talk about rent. It's a burden. Urban renters spend about 30% to 40% of their income on housing, compared to about 16%, 19% in other countries in the OECD. So you know that's more than double. Australians are spending more than double the average of other countries in the OECD. We are really doing tough. Housing is chaotic and it's not a good trend. Let's say that much so.

Zeke Guenthroth: 6:02

Notable shifts, cgt negative gearing that did have an impact in the late 90s, like 99. And that ultimately changed the economic outlook of all investment property. From that point on, post 2000, house prices have grown 7.2% annually, outpacing wage growth, which was 2%. And, as we know, house prices in australia, detached housing from 2000 through 2025 has actually outperformed asx 200. 2020 through 2022, interest rates covered, so on. We saw 15 to 20 price spike on average, which was even made worse from the first home by a grant in terms of deposit schemes and stuff like that. But you kind of have to have something like that because under 35s aren't getting into property anymore. In 1980 a house cost three times your income. Today it's 11.2 times or 13.8 times in sydney. Young australians are being locked out, entirely, completely destroyed. Housing affordability has become a generational crisis, turning the Australian dream into an inheritance lottery. So who's actually driving up the price and how is this occurring? And we'll get into supply and stuff, but there's a fair bit to go through, so just bear with me here.

Zeke Guenthroth: 7:20

Immigration great place to start 2023, 2024,. Australia had just shy of 670,000 migrant arrivals, with net migration of just under half a million 450,000,. Give or take this outpaced housing construction drastically, so ultimately we have more people coming in than we have houses getting built. Common sense we know how supply and demand works. A 1% population increase from immigration raises house prices by about 1% annually at 0.9%. Our economy is not in a great position. Australia's economy is terrible. We are a shocking nation for economical reasons. Our outlook is quite poor and immigration and housing ultimately mask our economic stagnation by boosting demand and it hides all the poor government planning we've had for the last 20 years in sectors like productivity, for example, or energy and that kind of thing not doing great economically. However, with the use of immigration and with the boosting of house prices and the control of interest rates, from an outlook it doesn't look that bad, but yes, it's quite poor. It's terrible.

Zeke Guenthroth: 8:45

Foreign ownership on property in Australia. So foreign buyers purchased about 5,500 properties worth about $4.9 billion in 2022 through to 2023. But that was only about 1% of transactions, so it's not actually a lot Like yeah, sure, it's $4.9 billion, but that's not a lot of transactions overall when you take into account the full amount of properties being purchased in Australia and the total amount of property value that's getting sold and bought per year. There's now been a two-year ban on foreign purchases of existing homes that started in april. I'm sure we can restrict foreign ownership and I actually completely agree with that. That's a great way to do it. But you know, if we remove the that little pool, as we said, it's a very small percentage of the people buying property in Australia. We remove that little pool. Ultimately the people here are still going to be paying the same prices. It's not really going to impact the overall market value. So then you've got in-country investors and homebuyers. Negative gearing and capital gains tax discounts save investors literally billions. At the moment Our property market for investors is really strong, which then again, due to the investors doing what they're doing, it inflates prices and homebuyers who are only about first-time homebuyers, I should say, who are only about 30% of lending are really struggling to get into the market. It's really difficult to do, and about 20% of households own investment properties, with 1% of taxpayers actually holding 25% of the rental market. So 1% of the population actually own 25% of the rentals. It's a big number.

Zeke Guenthroth: 10:36

Restrictive zoning and slow land releases have been limiting supply and high demand. Areas like Sydney and Melbourne are underdeveloped. We all know that. But let's talk about the zoning and land releases. So I've seen I obviously do a lot of work in development and land development and then building houses on it and so on, and what you see is let's just use Brisbane as an example.

Zeke Guenthroth: 11:00

Like the greater Brisbane region, there's land that we're working on now and selling now that doesn't register or title for another six or seven months. You're getting, you're picking up stuff like that for 400 grand and they're not going to be ready until next year and then you've got to build on that, which is another eight months or so. So it's another year and a bit call it a year and a half even until that property is actually ready to move into. Then you move on to council approvals, project delays and so on, increasing costs. Let's use WA as an example here. Lodging a building permit in WA right now. Let's use the Manjaro region for a bit of fun 60 days we're looking out for an approval for a building permit. So you get the land, you settle on it, they lodge the building approval and cool, 60 days later we have one, so that build's delayed an extra two months, pricing might change, there's delays, so on. They've got to redo things.

Zeke Guenthroth: 11:57

It's chaos. While the tax system is handing investors billions first, home buyers, on the other hand, are there begging for scraps with their hands out. It's a tough market. Young people are losing unless in a position where they can get into the market, and I would say, yes, this is going to contribute to the problem big time. But as a young person, investing in property is one of the easiest ways to get these problems sorted and help yourself long-term. If you just go in, you buy a home and you're paying it off at an 11 times multiplier of your household income, it's a problem. You need to do it as an investment property, otherwise it's just going to be frantic later on in life.

Zeke Guenthroth: 12:36

On supply shortfall, which is one of the most important things to talk about here ultimately, australia needs 1.2 million new homes by 2029, but it's only going to deliver about 825 000 and that's like current projections. I think it'll actually be less than that, but we'll wait and see. That's a 375,000 shortfall of housing 375,000 houses short. In 2024 to 2025, there's only been 127,000 new dwellings getting built or expected to be completed, which is down from about 150,000 in 2022, 2023. I mean, even if we forward, project that from in one year, you know 130,000, let's call it, and all these numbers I'm saying are like rounded to the nearest 10,000. So it's actually 127,500. I call that 130,000. Down from 148,500, I call that 150, down from 148 500, I call that 150 000. So be it. But for projecting 130 000 houses built in one year, multiply that by four, that's 520 000 houses. So if we need 1.2 million by 2029, which is four years away, and we're only projected to be getting $825,000 of the $1.2, but going on, last year we did $127,500. They're nearly expecting us to double our output in the next four years, which I don't think is going to happen, and so I think it's going to be less like more of a shortfall than $375,000. What does that do for the population? What does that do for homeless? Is there actually enough houses for people to live? What are the prices going to be like in 2030? How is the growth going to happen? How's the lending going to happen? Are interest rates going to drop? Are we going to increase serviceability? What's going to happen? I don't know, but yet housing stock per capita is shocking. It's we're at 400 dwellings per thousand people. That was back in 2015, compared to germany being like 600.

Zeke Guenthroth: 14:45

Builders are having more trouble than they've ever had. You know, there's labor shortages, so a chronic lack of skilled workers, including town planners, hence why councils are having trouble, and that slows construction. You've got material costs increasing timber and steel. They're squeezing back on the labour shortages. An example of that, actually in WA right now, is bricklaying. So bricklayers are getting paid about $3.50 per brick at the moment. Well, they might not be making that money, but the company's charging that per brick to go and lay it. So I mean, if you're talking a house, they do double brick over there. Normally 30,000 bricks in a house give or take, you know that's roughly 240 square meters. Then there's 110 grand give or take or 100 grand on bricks alone. There's just, yeah, that's a lot of money. There's red tape, so approvals are just lengthy and complex and because of the red tape, everything gets delayed and delayed and delayed and it just creates a backlog. And then there's financial pressures as well. So smaller builders are facing insolvency due to the high costs and the low margins. Like if you are a small builder and you have 10 houses that you're waiting on brickwork to get done and there's a shortage of brick layers. A big builder comes across, see someone working on your house and goes hey, mate, what are you getting per brick? They tell them, yeah, we'll do an extra 10 cents. Guess what? That small builder can't compete with that. Their houses aren't getting finished, they're. They're running out of money. So it is actually a frantic world out there.

Zeke Guenthroth: 16:20

Yep, first home buy grants, which obviously contributes to supply demand and a bit of government dysfunction, where you know they help people buy the first home. And I get it like you need it, because there's some kind of issue where young people are really struggling to get into their first home, especially at the current price point. It's pushed the train for first home buyers back many years. Like you can't. First home buyers are struggling to get into a property pre-30. It's like marriages First marriage now for a man is 32.8 years old Chaos. But yeah, they boost demand and there's no supply increase.

Zeke Guenthroth: 17:00

And so if you are helping people get into first home properties and you're going to say, yep, you can do it with a reduced deposit, we will increase servicing, you won't pay lmi. Then ultimately they can afford more than what they can actually afford, which then increases the chance of them putting in a higher bid, which then increases the price of a property. So it's a never-ending circle. And then you lower interest rates because you're like, oh you know, we need to. Well, then people get more servicing, they increase what they can afford and again we're back. It's as if the RBA should look at increasing GST as opposed to fiddling around with interest rates. But we all know what happens there fiddling around with interest rates, but we all know what happens there.

Zeke Guenthroth: 17:48

Then we move on to our government's policy on immigration. So sure, high immigration sustains GDP growth. As I said before, as a country, economically without immigration, we're doing really, really poor and it masks the recession that we are actually in. We do have stagnant productivity and poor planning, but you can cover that up and throw a blanket over it, sweep it under the rug with a cheeky bit of immigration, which I personally think needs to completely stop, skilled workers only. We can't keep having high levels of immigration because our housing crisis is one of the worst in the world, if not the worst, because our housing crisis is one of the worst in the world, if not the worst.

Zeke Guenthroth: 18:22

So let's just take an example. So there's this guy called Jake right, he's a nurse in Perth. He's been saving for a decade and guess what? He still can't afford a deposit. The government goes yep, we will give you a grant. He goes sweet, and he goes and buys a property that he couldn't afford originally, puts in a higher bid, someone else puts in a higher bid and the price is pushed up. The block next door is now worth more and people just keep on doing it. The system fails him, it fails everyone else and ultimately, we're in a never-ending cycle of home prices increasing.

Zeke Guenthroth: 18:56

You're probably wondering how does that tie back to one of my other favourite topics, which is broken families and birth rates? We've got a declining birth rate. We're all well aware of it. Australia's total fertility rate fell to 1.5 in 2023, which is the lowest it's been in like 17 years, which is now 19 years because it's 2025. And that's just not a sustainable figure. We need 2.1 as a repopulation. 1.5 is just way below that. Hence, immigration stops our population from dropping, keeps us out of a recession technically, on paper and tricks the whole world that I would say part of the fertility rate, or the birth rate, whatever you want to call it is partly due to housing costs. Whatever you want to call it is partly due to housing costs. Like, if we're waiting until 32.8 years old as a man now, or 31.8, sorry to get married, is that also a financial issue? I'll leave that for you to figure out. What we do know, though, is that a 10% rise in house prices actually correlates with a 1% drop in births among non-homeowners. So if you don't own a home, property prices go up 10%.

Zeke Guenthroth: 20:11

Chances are that you are then going to basically not choose to have a kid Impact on family structures. Not choose to have a kid Impact on family structures. You ultimately have to have dual income households to afford a mortgage. Now you can't actually have a single person ultimately go out and get a property, because the wage multiplication of affording that property is just beyond crazy. And then that creates a pressure for couples to get together and to basically work together to create an opportunity where they can buy the property, which then delays the marriage a bit because they're working on stuff like that. But then, as we learned in the last episode that if you move in together before getting married, then chances are you fail that relationship. So it's just a chaotic circle. Oh, yeah, I'm going to keep saying it. I'm circling back to circles every time, but yeah, it's a circle of chaos.

Zeke Guenthroth: 21:09

Single parent households were 22% in 2021, which were 80% mother-led. We know that they have less financial capacity for then buying a home, renting a home, doing whatever they can, which then deepens the supposed inequality of their actual outcomes. So if you're a single parent, how are you going to afford to be a parent and get a home at the same time? You're probably not. And then it's going to create more problems of struggling to commit to all these things and look after your children, and that creates more of the problem with fatherless homes.

Zeke Guenthroth: 21:41

Marriage is ultimately, as we discussed, a luxury good now. Economic stability is a prerequisite and homelessness rates up at about 128,000 right now. That's a lot of homeless people. Summing up that part, ultimately, housing costs are so high that Australia's birth rate is at a 17, 19-year low. When a home costs more than 11 times your income, starting a family becomes a pipe dream. The great Aussie dream now went from home ownership to having a family, and they're both becoming impossible.

Zeke Guenthroth: 22:19

Why are we one of the worst countries in the world for housing, or where do we rank? So we rank in the top three globally for the worst house price to income ratio in the world. In fact, sydney is actually the second worst in the world. Rent growth is exorbitant and we know that when the cost of property becomes higher, the investor is going to put the cost of rent up higher so they can cover their own tail. It's common sense. But global comparisons right. You've got australia 11.2 is the multiple for their income, their household income.

Zeke Guenthroth: 22:53

Poland 6.5, so about half. Germany 5.7, again about half Japan 4.9. Uae 5.5. Canada's up there with us. They've got high immigration supply challenges, a lot of investor activity. They're pretty similar in that sense. Uk, which you would think would be way higher, is actually only 9. And US is between 5.5 and 3.2. Some cities obviously have way more, like LA would be exorbitant, but the people that live there normally have massive incomes as well, so it's probably not actually that bad. But Poland the prices rose about 15% in 2025, but there's a lot of multi-generational ownership there which stabilizes the affordability. Germany ownership's pretty stable.

Zeke Guenthroth: 23:47

We won't really touch on that too much. Japan pretty stable, like there's not a, there's not a lot of issues there. Dubai has rapid development so they deliver housing very quick, hence why that's pretty easy. Canada we already touched on UK high demand, slow supply, similar, but you've also got a lot of people leaving the UK. And US, as I said, varies widely. So in Tokyo you know homes are costing five times the income and they build enough to keep up, whereas in Sydney you know it's nearly 14 times and we're meant to be 375,000 homes short.

Zeke Guenthroth: 24:23

Why can't we do better? We've got so much land. Why can't we just go build? And we've already touched on that with things like the cost, approvals, zoning, all of that. So what can actually be done? We as a nation or government or council or whatever, we need to fast track these land releases. We need to streamline zoning and approvals and get a real centralized model where we just bang it out. We need to smash it. These delayed stages, land releases, just try and get them done. Hey, we just need to pump it. That would take a lot of the pressure off and it'd bring housing forward, but it'd decrease the cost. Well, it wouldn't decrease the cost, but it would delay the increase in costs quite drastically.

Zeke Guenthroth: 25:09

More housing, more supply, the negative gearing of the CGT there's calls for that to be ultimately reversed or reformed and then redirecting the incentives further to first-time buyers or new construction builds. And then like redirecting the incentives further first home buyers or new construction builds and stuff like that. I actually don't fully agree with that because if you redirect it anywhere, we're going to have the same problem, like it's not going to be if we redirect it to first home buyers and prices are going to get driven up more. If we do it for new construction, then material costs are going to go up more and we're already struggling with that. Can't really reform that too much. It's not really going to have that impact. We need people renting at the end of the day, so Gowd, I don't think that's going to be a major thing that we can change.

Zeke Guenthroth: 25:57

Supply versus immigration this is probably the biggest area for improvement. If we're having 660,000 people come in a year, guess what? 660,000 people who need a home If we say for three years, hey, no one's coming in. Or skilled workers only coming in. If we can even drop it, like in a three-year period or four-year period, we're going to be looking at about a million. So what if we reduce that to 100,000? There's 900,000 less people that need homes, with 900,000 less people needing homes. That's, you know, maybe 450,000 less homes required, and then that shortfall of 375,000 by 2029 is no longer a shortfall. But the problem with that is we then have a recession ultimately, because we don't have the gdp cover-up. So we need to figure that out as well. It's going to be a long-term plan we need to think about.

Zeke Guenthroth: 26:59

Okay, how do we increase our gdp? What can we produce here that other countries can't? Do we increase our mining capacity? Do we increase our exports? What can we actually do to increase GDP if we delay immigration? We need to rework the grants. I think the first homebuyer grant just inflate prices. There's got to be some form of solution with that and we need to figure that out.

Zeke Guenthroth: 27:26

We as a nation australians specifically this is people within our country that do this well, but as a nation we do very poorly with intergenerational living. We don't really do it. It's not. It's not really a thing in australia. You Most people move out of their home between 18 and 25 and they'll go and rent somewhere or they'll go and live somewhere, and it's sort of like your parents are pushing you to do that I was out of my home at 16, is what they say so they expect you to do the same. It's just not affordable and it just inflates prices even more. We should look at multi-generational wealth or multi-generational living and work on that as a solution as well.

Zeke Guenthroth: 28:06

In the meantime, ultimately, I do think Australia can fix the housing crisis. I think it's a delayed problem. I think that it's a problem that's going to be around for a little while, and I think your first step is immigration. Your second step is figuring out GDP. Well, they're probably simultaneous, to be honest, but if you can do both of them, then you take off the strain and you keep the economy alive. So we need to do that.

Zeke Guenthroth: 28:27

I also think there's room for reform on GST. Let's look at this from a logical perspective. Right, if you increase interest rates, what happens? Affordability goes down, spending goes down, the investors pass that on to the renters. The renters then have to pay more as well. So you punish homeowners and renters quite drastically, whereas if you did it another way around, where you did it, on increasing GST, what is GST charged on? Pretty much any purchase you make, any discretionary spending and things like that.

Zeke Guenthroth: 29:03

Australia does have a spending problem. We all know it. So if you increase GST, then it sort of limits people from spending money on things aside from housing. I think that's a more viable solution, because then there's people going oh I need to buy this, but hang on, that costs another 10%. Now I'm not sure if I can afford that. So when they want to go and do these things they want to go buy a beer, they want to go buy cigarettes, they want to go do this or that or the other they have to think about it twice.

Zeke Guenthroth: 29:37

Whereas with interest rates you bring them up, you bring them down housing changes it gets passed on to other people, it punishes a certain percentage of the population as opposed to everyone. So I don't think that's the greatest way to do it. Ultimately, I could talk about this for a while. I could actually happily sit down and talk about this for the next three hours, four hours, and we could get further and further into different economic things and we could talk about all the different outcomes that we could have. But that's enough for today. I'm going to leave it with you there. Enjoy your day, dale.

Zeke Guenthroth: 30:16

As always, we hope you enjoyed the episode and if you did, you know exactly what needs to be done Hit that follow button, subscribe, share it to friends, family or even your co-workers, as sharing this podcast helps not just us, but everyone in the world to learn about world finances. Thank you, darling.