Housing affordability in Australia: How we got here and how we can improve it
June 18, 2025
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Housing affordability in Australia is at a crisis point. Getting more affordable housing projects off the ground demands a new approach.
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Housing affordability in Australia has reached a crisis point. A huge proportion of Australians can no longer afford to rent, let alone buy their own homes. And, while the problem is all over the news, we haven’t made any real progress when it comes to solving it.
At its core, the crisis comes down to economics. Construction costs are 40 percent higher than they were 5 years ago. And developments need viable returns; without them, they can’t proceed. Government and developers are equally frustrated, and they end up talking at cross purposes instead of working together to find solutions.
But there are incremental steps we can take that can help shift the equation. That starts with better collaboration, smarter planning, and incentives that make building affordable housing viable for developers.
Urban planners have a critical role to play as the link between government and developers. We understand the regulations, but we also understand the market. That means we can help shape practical, cost-effective solutions. And the end result? More affordable housing, without sacrificing liveability.
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As cities stretch outward and upward, the gap between housing demand and supply continues to widen.
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Housing affordability in Australia is at an all-time low
We believe safe, secure housing is a basic human right. What ‘home’ looks like may differ from person to person, but everyone deserves a safe, comfortable place to sleep at night.
But housing affordability in Australia has hit record lows. While there’s no one definition of ‘affordable housing’, it’s usually understood to mean housing that costs less than 30 percent of a household’s income. And it should be cheaper than the local market rate, notes the Australian Housing and Urban Research Institute. By that standard, truly affordable homes are becoming harder to find.
For example, let’s say you earn the average income of $100,000 a year. Only 14 out of every 100 homes are ‘affordable’ for you, according to the PropTrack Housing Affordability Report. For people earning around $50,000, it’s even harder—they can only afford 3 out of every 100 homes.
One reason housing affordability in Australia is such a problem is that we’re not building enough homes. The population is growing quickly, but new housing isn’t keeping up. We saw homelessness surge by 22 percent in the three years from 2023 to 2024, according to the Australian Homelessness Monitor.
Many of the people sleeping rough are in full-time employment. We’ve met people who are putting up tents beside the road to sleep in at night, then packing up and going to work in the morning. This should not be happening—and it doesn’t have to be.
Setting a higher bar for affordable housing in Australia
Improving housing affordability in Australia isn’t as simple as putting up four walls and a roof wherever we can find the space. It is about creating inclusive communities. And doing it in places people want to live, where quality of life is non-negotiable.
What does this mean in practice? For starters, affordable homes should be indistinguishable from their neighbours. They should be well-located, close to public transport, shops, schools, parks, and sportsgrounds. And they should have the same basic amenities we consider the bare minimum in more expensive homes: natural light, balconies, and room sizes fit for real people.
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Australia has one of the fastest-growing populations in the developed world, but housing supply is lagging much too far behind.
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But delivering this level of amenities takes trade-offs and smart strategy. We need to take a different approach to design. We must prioritise what matters most to residents—like solar access, natural ventilation, and communal open space—while finding efficiencies in layout, materials, and phasing. At the same time, density bonuses, reduced parking requirements, or targeted grants can offset costs that would otherwise push prices higher.
Take the Tolland Urban Renewal Project in New South Wales. The precinct faced significant challenges, including outdated social housing, limited amenities, and inadequate infrastructure. To address these issues, we’re collaborating with the Land and Housing Corporation, the Aboriginal Housing Office, the Argyle Consortium, and Wagga Wagga City Council. The goal is to create a vibrant community of around 500 new homes that includes social, affordable, seniors, and private housing. The project will also add new parks, roads, community spaces, and infrastructure to create a modern, welcoming, and safe neighbourhood to foster community spirit and enhance residents’ quality of life.
Creating affordable communities people want to live in
Improving housing affordability in Australia isn’t just a matter of building homes. It’s also about building communities. We want places where people genuinely want to live, not just where they can afford to. Across the country, we have worked with developers to deliver vibrant, welcoming neighbourhoods that residents are proud to call home.
For example, look at Northsea in Wollongong. It is a coastal development that integrates social, affordable, and market-rate apartments within a single, architecturally cohesive building. It shows how thoughtful planning can blend diverse housing needs without compromising on quality, location, or liveability.
Our team helped shape a built form that supports equity and longevity. We worked closely with developers and social housing providers to ensure that the affordable component wasn’t isolated or diminished. Northsea shows what’s possible when planning affordable housing puts people at the centre.
" }Improving housing affordability in Australia isn’t just a matter of building homes. It’s also about building communities. We want places where people genuinely want to live.
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How we can improve housing affordability in Australia
There’s no single fix for Australia’s housing crisis. Like most complex problems, improving housing affordability in Australia will take compromise and collaboration on all sides. But that doesn’t mean settling for poor outcomes—it means being pragmatic about what’s possible and working together to make it happen.
At the heart of the issue is economic viability. Even with planning approvals in place, many projects stall because the numbers simply don’t stack up. Construction costs are becoming a barrier to building. And without the right incentives—like increased density, relaxed parking minimums, or faster approvals—developers can’t move forward.
That’s where planning makes a difference. Decisions around zoning, fees, and infrastructure timing can make or break a project. Governments and councils need to recognise that viability is shaped by the systems they control—and planners are uniquely positioned to help shape those systems for better results.
In the Southern Tablelands of New South Wales, we worked with a local council to forecast housing needs and shape a long-term vision for growth. We started by combining town planning expertise with detailed GIS analysis and stakeholder consultation. That led to a place-based strategy that supports existing centres, leverages infrastructure, and aligns with local aspirations. This kind of forward-thinking planning helps councils unlock housing opportunities in the right places—making it easier to deliver affordable, sustainable homes where they’re needed the most.
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With the right planning, we can create homes that are inclusive, well-located, and built for real lives.
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As planners, we help both sides navigate complexity. We support developers to deliver affordable homes. And we also help the government create the conditions that make those homes possible.
Building affordable housing for today’s Australians
We’ve been talking about housing affordability in Australia for decades. But the problem is getting worse. That’s because it’s not just a planning issue or a political one—it’s an economic challenge, and it won’t be solved quickly.
Still, we can’t afford to wait. If we keep holding out for the perfect plan or the perfect time, nothing will change. We need to start now—by taking small, practical steps.
That means working together—developers, governments, and planners—to figure out what’s possible now. Better planning rules. Faster approvals. Smarter incentives. These small actions add up. We may not fix everything at once but we can make progress.
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