Aussie filmmaker reveals real ‘cause’ of housing crisis

An Aussie filmmaker who sparked a war of words with “boomers” over the housing crisis has now revealed what he says is the true “cause”.

Filmmaker Jack Toohey’s part two video on the housing crisis. Picture: Reddit

Aussie filmmaker Jack Toohey, who went viral last week with a video showing how much easier it was to buy a house in 1983, has released a follow-up pinpointing what he says is the “cause” of the current crisis.

Toohey, whose initial video sparked a heated response from talkback radio callers demanding an end to “boomer bashing”, now agrees that we should not “squabble over which generation is to blame”.

He instead points the finger at the rise of “neoliberalism” in the 1980s — raising the spectre of Ronald Reagan and Margaret Thatcher — leading to the sell-off of public assets and underinvestment in public housing.

“[Neoliberalism] views the world as economies first and societies second, which is minimising the role of government and removing safeguards in the belief that free, unregulated markets are more efficient,” he says in the video.

“Homes become investments, people become resources, policies become business plans. Back to 2023 and 40 years of neoliberalism has created staggering inequality — like, holy hell.”

He continues that “successive neoliberal governments from both sides of politics have defected [sic] their responsibility to plan for the future, instead opting to make a quick buck from the sale of our assets”.

The median house price in Melbourne is more than $1 million. Picture: iStock

“They’ve sold off public land, roads, air, education, rail, communications, banks, energy, water, natural resources, health and housing, and leave us to squabble over which generation is to blame,” he says.

“All the while the cost of living continues to grow and so do profits. The revolving door between politics and big business continues to spin. We’re in a housing crisis yet the government is only committed to build an average of 4000 new affordable homes a year. If we built at the same per capita rate as we did in the ‘60s, it would be 150,000. The neoliberal experiment has failed.”

Sydney and Melbourne, where the median house price is now well over $1 million, consistently rank among the most unaffordable cities in the world, alongside the likes of Hong Kong, Vancouver and San Jose.

In his original video, Toohey pointed out that “in 40 years, the average house price has increased by 14 times, whereas full-time salaries have only increased by 4.7 times”.

In other words, a person today would have to be making $300,000 a year to be in the same starting position as a homebuyer 40 years ago.

Jack Toohey’s part two video on the housing crisis. Picture: TikTok

Record 387,000 migrants

Toohey’s video does not mention immigration, which some economists have argued remains the key driver of pressure on the housing market.

New figures from the Australian Bureau of Statistics on Thursday revealed a net 387,000 migrants entered the country last year, the largest ever single annual intake.

Nearly 620,000 people arrived while 232,600 departed, according to the quarterly update, which showed Australia population grew by 1.9 per cent — the fastest rate since 2008, equating to 1361 people per day — to 26.3 million.

NSW took in 134,602 net overseas migrants, Victoria 120,460, Queensland 58,078, South Australia 23,857, Western Australia 37,910, Tasmania 3448, Northern Territory 1869 and the ACT 6671.

According to the most recent federal budget, Australia will take in an unprecedented 1.5 million net overseas migrants over the five years to 2026-27.

Reserve Bank governor Philip Lowe recently took a veiled swipe at the government during a Senate Estimates hearing, suggesting there was not adequate investment in housing and infrastructure to keep up with immigration.

Dozens queue for a rental inspection in Clovelly. Picture: Supplied

“We do need to increase the capital stock in line with the number of people in the country and that requires high levels of investment, and if we don’t do that, then we’re going to struggle,” he said.

“If we’re going to have 2 per cent more people in the country [this year], we need 2 per cent more capital, and that requires investment by business and investment by government. Solving the housing problem, I think that’s the single biggest thing we could do. And then we’ve got to build the transportation infrastructure to support that.”

Dr Lowe added, “Are there 2 per cent more houses? No.”

Last week, a new report from PropTrack predicted house prices could surge again to a new peak by January.

“Housing demand is stronger, likely bolstered by the surge in net overseas migration, as well as very tight rental markets,” said PropTrack senior economist Eleanor Creagh.

“Given limited new stock is coming to market, buyer interest is being concentrated, which is underpinning home prices and offsetting the downward pressure from interest rate rises. If the pace of price growth recorded over the past quarter continues, national property prices will surpass their prior peak by January 2024.”

And a recent rental affordability report by ANZ and CoreLogic noted “overseas migration flows [have] a notable and swift impact on the Australian rental market”.

Australia took in a record 387,000 migrants last year. Picture: Supplied

“This is because most overseas migrants are initially renters,” the report said.

“As some housing markets see an easing in rental growth, Sydney and Melbourne rental markets are likely to continue seeing high rates of growth as migration surpasses pre-pandemic levels.”

In March, an Anglicare snapshot found only four rentals across the whole country that were affordable for a single person on Jobseeker, out of more than 45,000 listings.

Last week, a Melbourne professor blamed “privileged” families with holiday homes for the housing crisis, arguing that while “your beach house is lovely … it’s killing Australia”.

David Hayward, Emeritus Professor of Public Policy at RMIT University, weighed in on the housing affordability debate in an opinion piece for The Age on Friday, pointing the finger solely at property investors for gobbling up supply.

I’m sorry Rhys but it’s really hard for me to see this as anything other than veiled racism and xenophobia under the guise of sustainability. It’s possible to house people sustainably and have our population welcome immigrants. Climate change ensure more migration, not less

— Jack Toohey (@jack_toohey) June 15, 2023

“We have been building vastly more dwellings than are needed to match population growth for decades, yet real prices and rents keep growing, affordability keeps falling, and ever-increasing government subsidies can’t keep up,” Prof Hayward wrote.

Economist Leith van Onselen, co-founder of MacroBusiness, said in response that claim was “patently false”, as evidenced by population growth versus dwelling completions.

“Australia didn’t build enough homes during the 15 years of ‘Big Australia’ immigration prior to the pandemic,” he wrote.

“And there is no way it will build enough homes over the five years to 2026-27 as a projected 1.5 million net overseas migrants land in Australia. Until commentators like Hayward acknowledge that mass immigration is driving the housing shortage, their analysis isn’t worth the paper it is written on.”

In response to a comment on Twitter raising the issue of population growth, Toohey said it was “really hard for me to see this as anything other than veiled racism and xenophobia under the guise of sustainability”.

“It’s possible to house people sustainably and have our population welcome immigrants,” he wrote. “Climate change [ensures] more migration, not less … so let’s focus on housing as many people as we can rather than leaving even more people out in the air.”