Australia's Housing Crisis: A 30-Year Policy Problem
The topic is housing policy
Migration increased and housing construction stopped, causing a crisis
Australia's housing problem started with a policy collision under the Howard government in the early 2000s
Migration was deregulated to address aging and skills shortages, while construction was heavily regulated
Migration increased, but housing construction decreased, causing a 30-year housing affordability crisis
These policies were introduced by different governments, causing unintended consequences and a crisis
In 1995, temporary migration was made demand-driven, not based on quotas
Building codes and the National Construction Code also became more complex
The first step was visas
Migration reforms started on July 1, 2001, and 2022
The Coalition government increased immigration, causing a blow-out in 2022-24
Many argue the new government took too long to slow down immigration
The 457 visa was introduced in 1996 and replaced in 2018
The Howard government created 457 visas based on the 1995 Roach Report
The 457 program had no quotas or labor market testing
The system was flawed, with a low minimum salary and no indexation
In 2022, the number of 482 visas increased as businesses sought cheap labor
Construction trades were excluded from 457 visas
Student visas also increased, but did not lead to more construction trades
The role of universities
On July 1, 2001, student visas became country-neutral
The new system categorized applications by institution, not country
International students could apply for permanent residency after completing a degree
Applicants received bonus points for their Australian qualification
Immigration policy became linked to universities accepting foreign students
The policy goal was to help overseas students enter the Australian labor market
Universities became migration gatekeepers, recruiting students for cash
Net overseas migration increased due to student visas
Student visas did not lead to more construction trades
457 visas also did not result in more tradies
Enter the backpacker
And then there are the backpackers
The working holiday maker visa was liberalized in 2005
Backpackers could stay longer if they worked in regional areas
The construction-climate link
The Howard government used building regulations to address climate change
The policy dated back to the Kyoto Protocol in 1997
The government developed energy efficiency measures for buildings
The stated intention was to reduce greenhouse gas emissions
The housing industry supported the changes
The first change was amendment 13 to the BCA in 2003
The changes were extended to all residential buildings in 2005
Housing stringency was lifted to a five-star target
The BCA was rebranded as the National Construction Code in 2013
Further changes were made to the NCC in 2022
New condensation management provisions were added
The NCC picked up new EV rules and tightened wet-weather details
In 2025, there was another refinement of the NCC
The Albanese government asked the Productivity Commission to review the NCC
The interim report was damning, revealing a lack of cost-benefit analysis
Compounding impact
The growth in building regulations was a compounding series of measures
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Adding to this was the growth of land use zoning and planning regulations
On top of that was progressive deregulation and a lack of control over temporary migration
The crisis was inevitable
Alan Kohler is a finance presenter and columnist
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