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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