(905) 441 0770 allen@allenehlert.com

Australia’s Warning to Canada

by | May 8, 2025

Imagine trying to find a new home, only to be met with a haunted house in desperate need of renovation. That’s just one of the many challenges facing buyers in Australia’s housing market. With soaring prices, limited supply, and fierce competition, the housing crisis in Australia serves as a cautionary tale for the rest of the world.

Sydney’s Booming Property Market

Sydney, known for its beautiful beaches and easy access to the city and airports, is facing a housing market boom. Ranked as the second least affordable housing market among 94 major cities worldwide, Sydney’s property prices have skyrocketed due to high demand and limited supply. The city’s growing population is driving up prices, making it increasingly difficult for first-time buyers, especially those with low incomes, to find an affordable home.

The Consequences of the Housing Crunch

The housing crunch in Australia has far-reaching consequences. Buyers struggle to find suitable homes, sellers enjoy inflated prices, construction firms face increased costs, and the government grapples with finding solutions. The tight supply of housing stock and low unemployment rate contribute to the high prices. Rental markets are also severely impacted, with incredibly low vacancy rates and soaring rents, particularly affecting the younger generation and lower-income individuals.

Australia has severe real estate challenges
Australia has severe real estate challenges

A Personal Story of Struggle

The housing crisis in Australia hits close to home for many individuals, like Harry and his mother living on the outskirts of Sydney. Rising costs and lack of affordable rental properties have forced them to move from house to house. They have experienced the hardships of eviction and endless searches for suitable rental homes. The competition is fierce, with many people attending inspections, making the process even more challenging for those in need.

The Hurdles in Building More Homes

While the pandemic has led to a building boom, it has also presented hurdles for construction firms. Increased costs for labor and building materials have made houses 30% more expensive to build than before the pandemic. This poses a significant obstacle to increasing the housing supply and easing the crunch. However, incentivizing social and affordable housing initiatives can help alleviate some of the challenges faced by the Australian housing market.

Australia’s housing crisis serves as a stark warning for the world. With skyrocketing prices, limited supply, and fierce competition, the dream of owning a home is becoming increasingly out of reach for many. It is crucial for governments and policymakers to take action and provide solutions that prioritize affordability and accessibility in the housing market.

Mortgage and Money Radio Logo
Allen Ehlert

Allen Ehlert

Allen Ehlert is a licensed mortgage agent. He has four university degrees, including two Masters degrees, and specializes in real estate finance, development, and investing. Allen Ehlert has decades of independent consulting experience for companies and governments, including the Ontario Real Estate Association, Deloitte, City of Toronto, Enbridge, and the Ministry of Finance.

Variable Mortgage Calculations

Variable Rate Mortgages: Not All Calculated the Same

Canadians are changing their preferences for mortgages. With a recent decrease in interest rates and speculation that more could be coming, brokers have been advising their clients to return to variable-rate mortgages from the 5-year fixed mortgages that have been the...
Insolvency

Mortgage Term: Insolvency

Discover what insolvency means, the types of insolvency, and how insolvency can impact your credit and your mortgage options.

40 Year Mortgage

40 Year Canadian Mortgages: What You Need to Know

Discover the implications of 40-year mortgages in the Canadian real estate market. Explore the impact on homeowners, developers, and government policies. Find out the pros and cons of extended mortgage terms and seek professional advice before making a decision. Stay informed about interest rate changes and government initiatives for affordable housing.

Condition of Sale of Buyer's Property

Condition of Sale of Buyer’s Property

Navigating the real estate market can be complex, especially when conditions like "sale of current property" clauses—commonly referred to as Sale of Buyer’s Property (SBP) conditions—come into play. With the cooling real estate market, these conditions have made a...
Rural Properties

Mortgages On Rural Properties

Mortgage lenders in Canada are often hesitant to finance properties in rural areas or properties with active farms for several reasons: Marketability and Resale Value Loan-To-Value Property Appraisal Challenges Zoning and Use Restrictions Maintenance and Condition...
PrePayment Privileges

More Than Rate: Pre-Payment Privileges

Learn about the different kinds of prepayment privileges and discover why prepayment privileges are more important than interest rate when it comes to lowering the cost of your mortgage.

Divorce: 4 Mortgage Options

Divorce: 4 Mortgage Paths to Moving Forward

Divorce and your mortgage: 4 paths to moving forward. Discover the option that works for you.

Insufficient Reserve Fund

Understanding Condo Reserve Funds

Discover what a condo reserve fund is, the signs it may be insufficient, and how to discover and avoid condos with insufficient reserve funds.

Employee Benefit Plan

Mortgage Term: ESOP

Discover what an ESOP is and how it can support your mortgage application particularly under a Net Worth Program.

Trigger Point

How the Trigger Point Impacts Canadians

With interest rate hikes, homeowners are facing the potential detonation of a financial bomb tied to their mortgages, the trigger rate. Let's get into how a trigger point on a fixed-payment, variable mortgage can have such a strong impact on Canadians: Impact of...