Law Talks Episode: Why housing affordability has become Australia’s “perfect storm”

Robyn: Good morning and welcome to law talks here on 4CRB. While housing affordability is one of the biggest issues facing Australians today, prices keep climbing, rents are at record highs and many younger people feel locked out of the market altogether.

At the same time, governments are introducing new initiatives and policies to try to ease the pressure. To help us unpack what’s being done and what individuals can do themselves, we’re joined by Attwood Marshall Lawyers’ Property and Commercial Law Senior Associate, Mieke Elzer. Thanks for joining us, Mieke.

Mieke: Thanks, Robyn.

Robyn: Well, how would you describe the current housing crisis here in Australia and what are the biggest factors driving it?

Mieke: I’d described the housing situation as a perfect storm. We’ve had strong population growth, particularly here in Queensland, combined with a shortage of new housing being built. On top of that interest rates and construction costs have risen sharply, which makes it harder for developers to complete projects and for buyers to borrow.

For retirees, this means the value of your home may have increased, but it also means your children and grandchildren are finding it harder to get a foot on the property ladder. Supply, not demand is the real bottleneck here.

Robyn: Yeah, we often hear about government schemes like first home buyer grants and shared equity programmes. How effective are these in actually helping people get into the market?

Mieke: Well, they can certainly help at the margins, but they don’t solve the bigger issues. Grants and equity schemes often push more people into the market without increasing the number of homes available, which can actually drive prices higher.

From a legal perspective, I’d also remind people that shared equity arrangements are complex. You don’t own 100% of your property, and that can create issues down the track.

These schemes are a short-term band aid. The long-term answer has to be more supply.

Robyn: I agree. Now rental affordability is a huge issue at the moment, with ideas like rental freezes sometimes raised in political debates. What are the pros and cons of measures like this?

Mieke: Well freezing rents sound attractive if you’re a tenant, but in practice it can actually discourage investment in rental housing. If landlords can’t keep pace with rising costs, many will simply sell their properties, which reduces the rental pool further. In my opinion, a better approach is to give investors certainty through stable laws and fair tenancy rules.

Because when more people are willing to be landlords, rental supply grows and that helps keep rent down.

Robyn: So on the Gold Coast in particular, short term rental platforms like Airbnb have been booming. But what impact is that having on housing availability and affordability?

Mieke: Well it’s having a very noticeable effect. Properties that could have been long term rentals are instead being used for short term holiday lets, which means fewer options for locals.

Councils are starting to respond with stricter regulations, such as requiring permits. That said, I think Airbnb is here to stay so it’s going to be a bit of a balancing act moving forward. So, tourism is quite vital to our local economy, but at the same time, we need to protect housing for residents.

Interestingly, my dad was recently over in his hometown in Holland, where virtually everyone in the little town where he grew up rents out part of their property in the Summer to tourists. My understanding through the Holland example is that they tightly regulate owners around this and they’re limited to say, renting out their space for 30 nights a year.

Now I think Byron Shire have moved towards this type of regulation and in my experience as a property lawyer, the real challenge in Australia is the lack of clarity and consistency.

Many property owners are unsure what rules apply, and that creates legal risk if they don’t comply.

Retirees who are thinking about using Airbnb for extra income, for example, need to be aware of zoning, insurance and tax implications. It’s not just a case of list your spare room and off you go.

Robyn: Yeah of course. And another option often talked about is changing zoning laws to allow multiple occupancy or high density. How much difference could that make?

Mieke: Well, it can make a real difference, but only if the infrastructure keeps pace. So, allowing more townhouses or apartments means more people can live in desirable areas. But unless roads, schools and medical facilities expand too, rezoning is just not tenable.

From a legal standpoint, zoning changes also take time to implement and are often met with resistance from people who have lived in that area for a long time and don’t want to see that town change. But in the long term it’s one of the most effective ways we can increase supply.

Robyn: We’re also seeing a rise in multi-generational households with parents, adult children and even grandparents all under one roof. What are the benefits and also the challenges of this particular trend?

Mieke: The benefits are clear. Families can pool resources, reduce costs and provide support for each other, especially with things like childcare or aged care.

But there are legal and practical challenges too. If you’re contributing money to a renovation or building a granny flat, it’s crucial to have clear legal agreements in writing about ownership and succession.

I’ve seen too many disputes arise where expectations weren’t set upfront.

Done well, though, it can be a very positive arrangement, and I would not be surprised if we do start to see a trend towards these types of ideas.

Robyn: Yeah, I agree. I think that’s the way we’re heading. For those listening who are worried about the housing situation, whether for themselves, or their children. What practical steps can they take to put themselves in the best possible position to secure a home or an investment?

Mieke: Well, the most practical step is to get good advice early, both financial and legal. Understanding your borrowing capacity, structure your savings and look at options beyond the traditional freestanding home. So, for retirees in particular, thinking about downsizing or investing with family, these decisions can free up capital, but they also have legal implications around tax, Centrelink and inheritance.

Being well informed and having a plan makes all the difference.

Robyn: And finally, what do you think there is to happen from both individuals and governments if we’re going to make housing more accessible and affordable in the future?

Mieke: On the government side, we need policies that genuinely increase supply, whether that’s streamlining approvals, investing in infrastructure or encouraging private development.

But on the individual side, I think we need to broaden our idea of what home ownership looks like. That might mean considering high-density living, for example, apartments or townhouses. It may mean considering relocating to more regional areas, or like we just discussed, it could involve investing with family.

Robyn: Well, that’s where we’ll leave today’s conversation. A big thank you to Mieke from Attwood Marshall Lawyers for joining us and helping unpack what is clearly a major issue right here on the Gold Coast.

Too many people, not enough homes, and infrastructure that’s struggling to keep up. Thanks for joining us.

Mieke: Thanks for having me, Robyn.

Robyn: You’ve been listening to law talks here on 4CRB, which you can hear every Friday morning from 9 o’clock and it is available for replay on our website 4crb.com.