Everyone’s a winner, maybe? Housing in Australia’s 2025 federal election
Homeowners and property investors are increasingly acknowledging that the system is unfair and unsustainable, write Stefanie Dühr and Cosmo Howard. The pair have some solutions.
Sunday’s major party campaign launches finally put housing front and centre, after weeks of head-scratching by commentators and voters wondering why such a consistently top-ranked issue had been largely ignored.
While the major party announcements have attracted significant media attention, the reality is they offer limited measures that fall short of tackling the structural problems in Australia’s housing system, largely because they want to avoid creating “losers” from the more comprehensive reforms needed to address the challenges facing Australians in the current housing market.
Meanwhile, the minor parties and independents also fail to present comprehensive solutions to the nation’s housing challenges.
Much déjà vu, little déjà new
Labor has pledged to fund 100,000 new homes for first home buyers, with means testing to target those most in need.
The plan includes working with states to ease planning rules, despite recent reforms already aimed at speeding up approvals. These planning changes have led to concerns about declining design quality, with poorly planned apartments, high-density developments prioritising profit, and underserviced fringe suburbs. While boosting supply is vital, attention must also be paid to the quality of urban design.
Labor also proposes lowering the deposit threshold for mortgage insurance – helpful for young buyers, but likely to drive prices up further.
The Liberal–National Coalition’s proposal has been described as even more radical.
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It borrows from international models – most notably from the US – by allowing homeowners to deduct mortgage interest from their tax. This approach has long been off the table in Australia. In the Coalition’s version, the policy is limited to first home buyers purchasing new homes, and only for the first five years. That narrows its reach, especially as many first home buyers are priced out of new builds.
But the policy also raises fundamental questions about logic and fairness.
If mortgage interest is tax-deductible, why not rent? And if such deductions are allowed, should the capital gains tax exemption on the family home also be reconsidered?
Ultimately, the Coalition’s approach risks inflating housing prices further while doing little to address the core issue: insufficient supply.
The other parties and candidates are largely sticking to well-known positions.
The Greens, consistent with their interventionist stance and arguably proposing what would be the most effective measures to address the root causes of the current malaise, call for major public investment in affordable housing, funded by increased corporate taxes.
Their platform positions them as defenders of everyday Australians against a wealthy elite that dominates the housing market. They continue to push for a national rent freeze – an eye-catching proposal, but one that raises questions about its effectiveness in addressing the deeper structural issues behind housing supply. As international examples suggest, such measures could even worsen conditions in the rental market.
Teal Independents are paying growing attention to housing affordability, but their approach remains fragmented and lacks a cohesive policy vision.
While they express a commitment to equality and fairness, this rarely extends to advocating structural reforms to income and wealth taxation that could more directly address housing inequality. At the same time, they face political headwinds in their electorates when it comes to supporting housing densification.
Lastly, One Nation predictably blames immigration for housing pressures, calling for lower migration levels while also advocating for increased housing supply and lower construction costs.
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However, their claims overstate the issue – Australia sits around the OECD average for new housing starts relative to existing stock. While immigration can add pressure, especially in the rental market, it also boosts labour supply and helps contain building costs. With unemployment low, we need migrants to fill the labour gaps in construction and other key economic sectors.
Hard choices in housing
The housing policy proposals at this election get some things right.
Focusing on younger generations and first homebuyers is positive – and reflects the fact that 85 per cent of those aged 18-24 worry about their future in the housing market. But overall, the policy initiatives do not address core structural issues in the housing market.
It’s tempting to see politicians as missing a golden opportunity to win votes by taking a bolder stance on housing, especially when survey after survey confirms that housing is a top concern for Australians across age groups and political leanings. Even homeowners and property investors are increasingly acknowledging that the system is unfair and unsustainable.
The reality, however, is more complex and more uncomfortable.
While many Australians agree that the housing system is unfair and inequality is too high, there’s often hesitation when it comes to backing the difficult reforms needed to fix it.
The core challenge is that meaningful structural change inevitably creates winners and losers. Governments, understandably, prefer to frame reforms as ‘win-win’ scenarios, but, in some cases, redistribution is unavoidable.
At the heart of the problem is a housing system shaped by competing values – each of which holds deep significance in Australian culture.
We believe in a “fair go” for the disadvantaged and the right of ordinary Australians to aspire to own a well-located home. At the same time, we prize self-reliance, reward for effort and the idea that people who take financial risks, such as investing in property, should enjoy the benefits.
These tensions raise hard but necessary questions we need to grapple with as a community:
- Are we comfortable with a system that enables housing wealth to be inherited, whether through estates or the so-called “bank of mum and dad”? This reflects our desire to support our children, but it also challenges the value of equal opportunity – should someone’s chances of owning a home depend on who their parents are?
- Should housing be a basic right or a vehicle for wealth creation? Most Australians have benefited financially from home ownership, and high ownership rates have played a key role in keeping old-age poverty low. But treating housing as a commodity – bought, sold, and rented for profit – creates deep insecurity for the third of Australians who rent.
- How far are we willing to go to support higher-density housing, especially in middle-ring suburbs where there’s the most space and potential? Here, we face a choice between preserving neighbourhood amenity and green space and addressing the urgent need to build more homes.
These are not abstract policy dilemmas. They’re deep cultural value tensions we must come to terms with and resolve.
While it’s easy to blame governments for decades of inaction on housing, the truth is we also need to look in the mirror. What do we, as a society, really want from our housing system?
Stefanie Dühr is a professor at the University of South Australia and Cosmo Howard is an Associate Professor at Griffith University.
