Why life in Australia has become ‘impossible’ – and the moment that changed our country forever

A video explainer on how living in Australia has become financially impossible has gone viral, with viewers pointing out that the problem is popping up around the world.

The video from Dutch YouTube channel Hindsight, published on November 30, said rising house prices had put homeownership out of reach for young people and threatened to deepen a persistent intergenerational divide in the country.

“The Australian dream is about owning a home, but that ideal is now increasingly out of reach,” the video’s caption reads.

The narrator in the video explains that despite Australia’s enormous size, about the same size as the US minus Alaska, almost its entire population lives in just five capital cities, with about 40 percent in Sydney and Melbourne alone.

“The Australian dream is dying,” they said.

According to a 2024 Demographia report, Sydney, Melbourne and Adelaide are among the 10 most unaffordable cities in the world, with Hong Kong topping the list.

‘The average cost of a house has doubled [in Australia] from less than $500,000 in 2011 to almost $1 million in 2024. And wages haven’t kept up,” the narrator explained.

They also pointed to figures backed by the latest ANZ Corelogic Housing Affordability Report, which showed Sydney house prices now cost ten times the average salary.

“So more people want to rent and this demand is one of the reasons why rental prices are now spiraling out of control, putting the Australian dream of buying a home even further out of reach,” the narrator said.

The video explains that a minimum wage worker must spend 68 percent of their income on rent, which “makes it impossible to save” for a security deposit.

‘This increases the number of people who will always rent, while homeowners become incredibly wealthy. The fear is that this could create a two-class society.’

The video argues that the increasingly competitive rental market is being fueled by more people moving to Australia.

“Australia has admitted a record number of immigrants in the past two years. Critics claim this was irresponsible because it coincided with extreme difficulties in the construction industry,” the video said.

Australia is facing rising costs for new construction projects precisely when they are needed most, as inflation combines with labor and supply chain costs to push up the price of building a new home by almost 40 percent.

‘Immigration can help Australia fill the gaps in the workforce, and in the form of international students it generates billions in revenue every year.

‘In fact, education is Australia’s largest non-mineral export. But it also adds to the already increasing domestic pressure.”

Commenters on the video agreed that it was a huge problem not only in Australia but in other countries as well.

‘When I was a kid in Australia, on one wage a person could pay off a house, live comfortably and go on holiday with the family. Now at least two wages are needed and that’s not even enough,” said one commenter.

“Dear Australia, we have the same problem. Signed with Canada,” a second added.

“Has anyone else noticed that this exact same story (with slight variations) is currently happening in seemingly every province in the world?” added a third.

The video shows that Australia’s economy grew rapidly in the 1950s and the country had one of the best living standards in the world.

‘Then the Great Australian Dream was popularised. The ideal became to own a detached house on a quarter-acre plot in the suburbs with a garden and a Holden, the real Australian car.

‘This led to Australian cities spreading out. Today Melbourne is six times bigger than London, but with fewer inhabitants.

‘Sydney is even more extreme. It is 14 times larger than Berlin, but with only 2 million more inhabitants.

“The government encouraged homeownership with policies such as the first homeowners’ subsidy, and homeownership rose from 52 percent in 1950 to a peak of 71 percent in 1968.

“This happened in other countries too, but Australia was top of the class.”

The filmmakers said Australia’s housing problems began in the 1980s when there was a shift in priorities and housing changed from a basic human right to an asset for investment and profit.

‘The government encouraged people to buy a second home and put it on the market to rent. This increased the number of investors on the market, increased demand and therefore prices.’

This shift in the perception of housing as a commodity saw prices steadily increase until they reached a fever pitch when interest rates were slashed to near zero when the Covid pandemic hit in 2020.

‘These extremely low rates made it easier for people to get a loan for a house, demand increased and prices rose. In addition, the government has spent billions of dollars on programs designed to help low- and middle-income families purchase their first homes.”

The filmmakers said this was one of many factors leading to increased demand and that it wouldn’t be a problem “if there was a good balance with increased supply, but that’s one of the things that went wrong.”

They argue that a decline in construction of government-sponsored housing for low-income people, along with an increase in red tape for new housing and resistance to high-density developments where they are needed, have all led to the drying up of the offer.

‘Most people want more housing, but ‘not in our backyard’ is the resounding refrain.’

The video concludes with a powerful message by pointing out several solutions proposed by economists to solve the housing crisis.

These include relaxing planning restrictions, providing more public housing, tightening tax breaks for investors and reforming the way states collect taxes on housing.

“It’s now up to politicians to convince Australians how to tackle this problem… but there is at least some consensus among economists.”