Solving the housing affordability crisis remains elusive
Radical 30% property price fall that would solve Australia’s housing affordability crisis is highly unlikely, according to AMP economist My Bui.

A radical 30% property price fall that would solve Australia’s housing affordability crisis is highly unlikely, according to AMP economist My Bui.
While a slowdown will continue for the first half of the year, stakeholders will ensure a property crash is off the cards, My told an audience of conveyancers at Dott & Crossitt’s Kick-Off 2025 event at Sydney’s Australian Museum.
“The affordability issue is a real problem in Australia,” said My.
“The reason why we cannot solve it is just because there are way too many stakeholders involved here.
“And the simple fact is no one wants prices to fall by 30% at all.
“So that is why over the long term we continue to see prices grow in Australia, especially with a depressed supply pipeline in Australia.
“Without more units in the mix, it is very, very hard to see supply improving massively to mesh the level of demand.”
The chronic undersupply of housing is particularly notable in major cities like Sydney and Melbourne.
Vested interests also play a role, with tax structures discouraging downsizing by older homeowners and government projects competing for construction labour, according to My.
“We need to see more of that labour diverted to building new homes, not just government projects,” she said.
“Tax reform to encourage more down sizers in the market would be a good thing as well.
“Stamp duties have actually discouraged a lot of baby boomers and people who want to downsize to smaller homes from moving out.”
Matching immigration to supply levels and the capacity of the market to supply more housing is also vital.
“These are all wish lists and most of them long term.
“Our forecast for this year, there will be more weaknesses to come in the market as the affordability issues bite into households budget.
“But over the medium term, we continue to see home prices being in the positive throughout different capital cities in Australia.”