It’s hard to dispute the single biggest issue facing Australia today is a seemingly runaway housing market.

A now two-decades long housing crisis has seen the family home increasingly being treated as an investment, rather than a human right.

It’s frustrated a generation of renters.

But it’s also made for some of the wealthiest Australians in a generation.

RBA leaves rates on hold

The Reserve Bank leaves interest rates on hold at 3.6 per cent.

The latest official data show total household wealth rose 2.7 per cent, or $470.1 billion, in the three months of the June quarter 2025, driven mainly by increases in property and land values.

And the higher property prices go, the longer it’s taking many Australians to get over the line for a home loan.

Waiting for Godot

In 2017, Sydney buyers needed on average 8.2 years to save the $215,133 deposit required to purchase a median-priced house.

That was three years longer than the national capital city average of 4.9 years.

Today, it takes a buyer at least 13 years to save for a median-priced house in Sydney, which is well over $1 million.

This assumes a first-home buyer with an average annual income of $100,000 who saves 15 per cent of their income every year.

This means that, at a basic level, a family pulling in an “average” combined income two decades ago, who could afford to buy a property, are now destined to rent indefinitely.

The government continues to defend its housing target as “ambitious but achievable”. (
ABC News: Peter Drought
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Is this fair?

The Reserve Bank governor Michele Bullock thinks not.

During Tuesday’s Reserve Bank interest rates media conference, she remarked, “It’s a very, very difficult situation, David.

“And as an individual and as a citizen, I think it’s we’re in a very difficult position with the property market and I don’t, I don’t actually think that most reasonable people think that this is a good outcome,” Governor Bullock said.

Getting the job done

One solution is to push a wrecking ball through the economy with higher interest rates.

The resulting increase in unemployment and mortgage repayment defaults could see a significant correction in the property market.

But it’s an absurd solution.

A reasonable policy idea, on the other hand, is to significantly increase supply to absorb the increase in the population, especially through migration.

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The government has a broad goal to create 1.2 million well-located homes by mid-2029.

To achieve this, there needs to be an increase of 240,000 homes per year.

The current building completion rate is roughly 190,000 per year, based on March quarter Bureau of Statistics numbers.

Treasurer Jim Chalmers recognises it’s an “ambitious” target but insists it’s still achievable.

RBA pours cold water on housing supply

The fundamental problem, in economic speak, is a “structural deficit of supply”.

Put another way, it is an ongoing shortfall of supply to meet increasing demand.

Despite government “action’ to fill this gap, in a dose of realism, Ms Bullock told the media she did not see any progress on filling that supply hole for two years.

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“I’ve said a number of times before the problem in the housing market is a structural deficit of supply,” she said.

“That is the problem, and governments now get that, and you are seeing some action on that, but it’s going to be slow to work its way through.

Pressed on whether she was “confident” it would “work its way through”, she said, “It’s going take time”.

Pressed further she responded by saying, “I’m not confident it’s going make any impact in the next two years.”

Soul destroying for renters

Renters face very different challenges to mortgage borrowers.

For example, if you and your school-aged children are required to leave a lease, it can involve pulling them out of school and starting afresh in another suburb.

The monthly uncertainty around rental hikes and moving at short notice takes a toll.

Meanwhile, property values continue to rise, especially as interest rates fall.

There’s no question the government’s policies will have an impact in housing affordability.

But the Reserve Bank governor has said she does see any material change in housing affordability until the next election.

It was an off-the-cuff honest admission from a tightly script RBA governor — with implications for millions of Australians.

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