Lazy Policy Won’t Fix Crisis
In yet another case of lazy policy thinking and really bad media behaviour, we’re now seeing older Australians being blamed for the nation’s worsening housing crisis.
The Retirement Living Council suggests more than 59,000 homes in Australia could be “freed up” if retirees weren’t fearful that selling their large family home was going to have a significant impact on their pension.
It recommends a series of changes targeted at older Australians with low to moderate wealth to “rightsize” without financial penalty.
Some commentators have seized on this, claiming that if only Boomers would move out, we could solve our housing supply crisis overnight – which is an absurd proposition.
Let’s be clear - this isn’t about stubbornness or selfishness on the part of older Australians. It’s about policy failure at every level of government for the past two decades.
Older people downsizing doesn’t increase the supply of dwellings. The shortage of homes is the big over-riding problem in the housing crisis and Australia needs to create a large number of new dwellings.
Downsizing is moving from one home to another – it doesn’t unlock new supply as our shallow media has claimed.
The average Baby Boomer is living in a home that the average first-home buyer can’t afford – so, again, a Baby Boomer downsizing does not unlock new supply for young Australians.
Financially, downsizing is often a terrible deal, the cost of selling and buying is prohibitive and can easily exceed $100,000 once stamp duty, commission and selling costs are taken into account.
Boomers aren’t just sitting in oversized houses for the sake of it — many want to stay close to family, maintain their communities, and live in homes filled with decades of memories.
Even if every single empty nester magically sold tomorrow, it wouldn’t come close to fixing the structural shortage.
Rethinking Regional Population Growth
New modelling reveals Australia faces significant demographic challenges, with inland areas losing population while coastal lifestyle regions boom. Between 2014 and 2024, Australia added 3.7 million people, mostly to major cities and coastal towns, according to Bernard Salt and data scientist Hari Hara Priya Kannan.
The trend is set to continue, with a projected 3.6 million more people by 2035 driven by retirees moving into regional areas and young people leaving smaller towns for cities. In places like Horsham and Charters Towers, ageing populations are rising while younger cohorts decline.
Salt warns that this shift will strain local services unless action is taken: “We need a national demographic audit to identify where the greatest shortages of essential workers will emerge and act on it.”
Meanwhile, growth hotspots like Wyndham and the Gold Coast will require rapid infrastructure investment to meet soaring demand. With targeted planning and workforce distribution, Australia can better manage these emerging pressures across both growing and contracting communities.
Listings Rise, Prices Lift
Australia’s housing market is showing fresh momentum, with falling interest rates boosting buyer confidence and listings. NAB executive Denton Pugh says the sector has “reached a turning point” following the RBA’s February rate cut, with further reductions expected. “This isn’t a boom, but the tone has changed,” he said, citing a rise in first-home buyer and upgrader activity.
March saw national home prices lift 0.4%, with gains strongest in Darwin, Adelaide, and Brisbane. Listings rose 6.1% year-on-year, led by Sydney and Perth. REA’s Angus Moore noted that lower borrowing costs and rising prices were encouraging sellers back into the market.
Despite renewed activity, affordability and supply issues persist. PropTrack data shows modest national growth of 0.3% in March, with Sydney and Canberra leading. REA economist Eleanor Creagh expects steady, measured growth to continue.
Meanwhile, debate continues over Labor’s proposal to expand the First Home Guarantee Scheme. Critics warn it may fuel demand without solving supply, while supporters say it could ease deposit barriers for younger buyers.
Now in Five Cities
Adelaide has officially joined Sydney, Melbourne, Brisbane, and Canberra as the fifth Australian capital city with a median house price above $1 million, according to Domain’s March House Price Report. Adelaide’s median now sits at $1,000,202.
While house prices continue to climb, growth has slowed to a third of last year’s pace. Supply is improving in cities like Brisbane, Perth and Adelaide, but not enough to ease pressure nationwide.
Domain’s Chief of Research, Dr Nicola Powell, said, “It’s a good thing supply is rising, but that doesn’t mean we still don’t have a housing crisis.”
She added that with increased listings and interest rate cuts expected, now could be an opportune time to buy.
National rents remain high, averaging $650 per week. Sydney continues to top the list, with renters paying $9100 more annually than those in Melbourne.
Canberra, meanwhile, saw the smallest rent increases in early 2025, offering some relief after a steep rise at the end of 2024.
Rent Surge Returns in Early 2025
After slowing late last year, rent prices have surged again, with PropTrack reporting a 1.6% rise in the March 2025 quarter. The national median weekly rent now sits at $630, up 5% from a year ago adding around $1,560 annually for tenants.
REA Group economist Anne Flaherty said, “The speed at which rents are rising has picked up reversing the trend of slowing growth seen late last year.”
Apartments are leading the increase, with unit rents rising 3.2% in capitals and 3% in regions, compared to modest growth for houses.
Capital cities, particularly Queensland and South Australia, drove the national increase. Sydney remains the most expensive, with renters paying $70 more per week than those in Perth and $9,100 more annually than in Melbourne.
Despite recent momentum, Flaherty expects “a more modest pace of rent growth” through the rest of 2025, though affordability remains a growing concern as rents have surged 14.2% in two years well above inflation.
