The housing crisis in Australia and why it’s a global problem

Australia is facing an acute housing crisis that threatens the livelihoods of its residents and also the broader social, economic and environmental fabric of its cities. A recent 2024 Urbis City Leaders Survey has revealed a striking decline in confidence among urban leaders regarding their cities’ ability to tackle this issue. Housing affordability has emerged as the most critical challenge, with 90% of respondents ranking it as a top priority. It is a situation that is tough for Australians and equally tough for other big cities across the world, but innovative solutions being implemented to address these pressing issues, writes John Ridgeway.

The situation in Australia is dire with two-thirds of households’ experience housing stress and with renters facing even more severe pressure. Home prices and rents have surged, outpacing wage growth and leaving many families struggling to make ends meet. This strain is compounded by rising costs of living and economic pressures, creating a perfect storm of housing insecurity.

For urban planners, housing is not just a standalone issue - it underpins societal well-being, economic participation and environmental sustainability, which is why Australian city leaders have proposed several new strategies to turn things around. These include incorporating secure housing as a central tenet of policy frameworks, developing platforms for real-time tracking of housing metrics, exploring new housing and financing models and introducing more institutional investments in affordable housing.

Housing crises in other cities

The challenges faced by Australian cities are not unique. Around the globe, urban areas struggle to balance housing affordability, population growth and environmental sustainability.

San Francisco, USA, is a good example of the consequences of an overheated housing market. The tech boom has driven housing demand sky-high, pricing out lower-income residents. Rent and home prices have soared, with many middle-class families forced to leave the city. Municipal leaders are now mandating developers to include affordable units in new projects, are limiting rent increases to stabilise costs for tenants and have launched community land trusts to acquire land to ensure long-term affordability.

In Berlin, Germany, rapid gentrification has displaced many residents, sparking protests and a growing housing movement. Rent caps introduced in 2020 were a bold attempt to curb escalating costs but faced legal challenges. Local authorities are now purchasing private housing to create public stock and are strengthening tenant protections to prevent arbitrary evictions. Empowering citizens to vote on housing policies, such as expropriating major landlords, have also been introduced.

Mumbai, India’s, housing crisis stems from rapid urbanisation, limited land availability and stark economic inequality. The city’s slums house millions in substandard conditions, while luxury developments dominate the skyline.

Solutions in progress:

The city now requires developers to build low-cost units and replace informal settlements with planned housing. Integrating affordable housing with transport hubs is also being integrated into the overall housing strategy.

However, it is not all bad news. Tokyo, Japan’s, housing policies stand out as an example of success. Despite being one of the world’s largest cities, Tokyo has managed to keep housing relatively affordable through policies that encourage development.

These include streamlined approvals and minimal restrictions on land use, a policy to encourage developers to meet demand and a programme to provide subsidies for low-income residents.

Several other cities worldwide are also adopting forward-thinking approaches to alleviate housing challenges. Cities like Amsterdam, The Netherlands, and Vancouver, Canada, are pioneering modular construction techniques to reduce costs and build quickly. These methods also align with sustainability goals, as they often involve less waste and lower emissions.

Singapore has developed a comprehensive housing data portal that integrates supply, demand and pricing metrics. Such platforms empower policymakers and the public with actionable insights to focus on what needs to be achieved. In Barcelona, Spain, community land trusts and cooperative housing models give residents more control over housing affordability and quality. New Zealand’s KiwiBuild programme targets affordable housing construction on a national scale, integrating government and private sector efforts.

Looking beyond immediate housing needs, cities face other interconnected challenges related to climate change, population growth and inequality. Australia’s housing strategies could take cues from global efforts that address these broader issues.

In Rotterdam, the Netherlands, flood-resistant housing designs and sustainable building materials have become central to urban planning. Curitiba, Brazil, is renowned for its inclusive urban design, with affordable housing integrated into its transit-oriented development model. Seoul, South Korea, uses smart city technologies to monitor housing markets and optimise urban resource allocation.

All this means that Australia’s housing crisis reflects a broader global challenge, demanding coordinated action and innovative solutions. The interconnected nature of housing with social equity, economic productivity and environmental sustainability underscores its importance. By learning from successful global examples and fostering collaboration across sectors, Australian cities can begin to rebuild confidence and address housing challenges effectively.

Incorporating flexible zoning laws, introducing modular construction and embracing community-driven initiatives are just a few ways forward. While the road ahead is challenging, a systemic, inclusive and forward-looking approach can transform housing from a crisis point into a cornerstone of urban resilience and prosperity.