From the archive — a piece of Noel's worth revisiting while the housing affordability debate rolls on.
If you are in your forties or fifties, housing probably shows up in your life twice over: once in your own mortgage or downsizing plans, and again every time an adult child asks how they will ever afford a place of their own. Noel Whittaker's argument in this article is that most of the public debate blames the wrong culprits.
His case starts with borrowing capacity. He traces the cash rate from 6.25 per cent in 2007 down to 3 per cent after the global financial crisis, to 1.5 per cent by 2016, and to 0.1 per cent during the pandemic. Each fall handed buyers a bigger loan for the same monthly repayment, and prices rose to meet it. He points out that when APRA, the banking regulator, tightened lending standards between 2017 and 2019, Sydney prices fell even while wages kept rising — which is hard to explain if investors or tax concessions were the main driver.
The second half of his argument is about what governments add to the price of a new home. In 1976, taxes and charges made up less than 10 per cent of a new house-and-land package. On his figures they are now somewhere between a third and a half, approaching 50 per cent in Sydney — roughly $576,000 of a median new home. He cites Housing Industry Association research putting the figure at 33 to 41 per cent in Brisbane and 37 to 43 per cent in Melbourne. On a $700,000 Brisbane package, that means a buyer is borrowing a couple of hundred thousand dollars simply to cover government charges, and paying interest on it for decades.
The practical thread for anyone our age is this: schemes that lift what buyers can borrow — grants, shared equity, looser lending — add competition without adding houses. If you are weighing up when to downsize, or how much help to give a child, credit conditions are likely to matter more to the price than any of the tax arguments dominating the headlines. It is one person's reading of the evidence, but it is a well-argued one.
Interest rates lit the fire. Governments then poured petrol on the flames.
Read the full article: What's really driving Australia's housing crisis? — Noel Whittaker, YourLifeChoices, 7 July 2026.
Borrowing, property and the arithmetic behind both are covered in plain English in Making Money Made Simple (26th Edition) — the book that has taught generations of Australians how money actually works. Buy direct from the author for $16.99, in PDF and EPUB, and start reading straight away.