Student: Sudev Lavin Krishnan
ID: 4206967

For as long as anyone can remember, Australia has been known as the “Lucky Country” - country of sun and space and opportunity. For millions of Australians today, that luck may soon be over. The economic, wage, and urban street silence is unique. This is an explanation of the numbers.

122,000+ Despite rising house prices to all-time highs across the nation, homelessness was up 5.2% for Australians on Census night last year (2021) compared with the 2016 Census.

Chart 01 - Overview
Australian House Prices Have More Than Doubled Since 2012
Median Capital City Residential Property Prices, 2012-2024. Hover for values. Use arrows in the legend to switch between cities.
Source: Australian Bureau of Statistics. (2024). Value of dwellings, September quarter 2024 (TOT).. ABS. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/total-value-dwellings/latest-release

Sydney’s median house price grew from $555,000 in 2012 to over $1.45 million in 2024 - a 161% increase in just twelve years. The national median has almost doubled. But has wage income caught up with this phenomenal growth?

Chart 02 - Overview
Pay is not keeping up with the cost of living - For years.
Annual % change: Wage Price Index vs Consumer Price Index (CPI), 2010-2024. Green bars are for real wage increases and red are for real wage decreases.
Sources: ABS. (2024). Wage price index, Australia, December 2024. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/latest-release; ABS. (2024). Consumer price index, Australia. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release

The jump in inflation was unprecedented for the past 30 years, reaching its highest of 7.8% in 2022 before cooling down in 2023. Earnings simply couldn’t maintain pace and millions of Australians have seen a decrease in real pay, particularly when compared to pre-pandemic levels.

Chart 03 - Multivariate
Housing is catastrophically unaffordable everywhere - Violet W. Greenwood, Jr.
State trends in house price-to-income ratio 2012-24. The house value corresponds to the bubble size (or the median house value). The ratio of 5× or higher is considered internationally severely unaffordable. Toggle states in legend to compare.
Sources: ABS. (2024). Total value of dwellings; ABS. (2024). Employee earnings and hours, Australia. https://www.abs.gov.au

NSW had already hit the internationally recognised “severely unaffordable” level of 5× in 2012. By 2024, all key states have joined - NSW is over 13×. Across Australia, the house has become a dream for most young people under 40 that they just can’t seem to attain.

Chart 04 - Multivariate
The Affordability Collapse: One State One Year at a Time
State and year-level housing affordability index, which represents 100(fully affordable):0 (completely unaffordable). Hover any cell to see more info. No state has been spared.
Sources: ABS. (2024). Total value of dwellings; ABS. (2024). Employee earnings and hours, Australia. Price-to-income ratio (affordability index) measured on the 0-100 scale at the state-year level.

In 2010, the capital cities of Tasmania and South Australia were actually affordable. By 2024, the whole map turns to red and orange. Sydney’s once-ubiquitous housing crisis has now spread across all parts of the nation - without one single refuge left.

Chart 05 - Multivariate
Increase in housing units does not necessarily reduce homelessness.
History of homogenized rate (per 10k population) and median home price by state during five Census years. The size of the bubble represents the state’s population size. The trajectory of each state is illustrated using dotted lines. Toggle states in legend.
Source: ABS. (2023). Estimating homelessness: Census 2021. https://www.abs.gov.au/statistics/people/housing/estimating-homelessness-census/latest-release; AIHW. (2024). Homelessness and homelessness services. https://www.aihw.gov.au/reports/australias-welfare/homelessness-and-homelessness-services

Homelessness continued and in some States worsened despite the increase in house prices over the past 20 years in all of the States. Houses in Queensland and Tasmania, where safe places were previously affordable, are now seeing the number of homeless people increasing along with increasing house prices. The Australian safety net of the ‘lucky country’ is compromised at every level.

The Story in Summary

Australia’s housing shortage is a policy, market and opportunity failure in five charts:

  1. The price of goods and services doubled over a ten year period, with the greatest increases in Sydney and Brisbane.
  2. There were pay shortfalls against inflation, especially in 2021–2023
  3. All states scored insufficient on the “severely unaffordable” metric
  4. No state escaped the largest decrease in affordability - it was everywhere - in virtually every state affordability fell dramatically.
  5. There has been no improvement in the challenged issue of homelessness, despite aggregate dwelling values surpassing $10 trillion.

For the foolish as well as the “lucky” one, the “lucky country” is growing less ‘lucky’.

References

The Australian Bureau of Statistics (ABS). (2023). Estimating homelessness: Census 2021. ABS. https://www.abs.gov.au/statistics/people/housing/estimating-homelessness-census/latest-release
Australia’s National Bureau of Statistics. (2024a). Australia CPI (all items): September: QS.64793.0, 2024 Q2. ABS. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release
Australian Government, ABS. (2024b). Total value of dwellings Q3 2024. ABS. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/total-value-dwellings/latest-release
Australian Bureau of Statistics (ABS). (2024c). November 2024 WPI for Australia. ABS. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/latest-release
The ABS has provided the statistical information. (2024d). Earnings and hours of employees - Australia. ABS. https://www.abs.gov.au/statistics/labour/earnings-and-work-hours/employee-earnings-and-hours-australia/latest-release
Australian Institute of Health and Welfare. (2024). Homelessness and homelessness services. AIHW. https://www.aihw.gov.au/reports/australias-welfare/homelessness-and-homelessness-services
Demographia. (2024). International Housing Affordability: 2024 Edition. http://www.demographia.com/dhi.pdf
R Core Team. (2024). R is a program for statistical computing and statistics, version 4.3.3. The R Foundation for Statistical Computing. https://www.R-project.org
Sievert, C. (2020). Interactive Web-based Data Visualization using R, plotly, and shiny. Plotly phrases.Plotly sentences.
Wickham, H, François, R, Henry, L, Müller, K and Vaughan, D. The R package dplyr: A grammar of data manipulation (2023). https://CRAN.R-project.org/package=dplyr
Wickham, H., Vaughan, D., & Girlich, M. Partly messily clean data tidyr: Tidy messy data (R package version 1.3.1). https://CRAN.R-project.org/package=tidyr
Wickham, H. A book on ggplot2: Elegant graphics for data analysis (2016). Springer-Verlag. https://ggplot2.tidyverse.org