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Chief executive Matt Barrie reveals the huge problem with Australia that is the «root of all evil» – and why many young Australians may have an equally bleak vision of their future


A wildly expensive housing market that has been allowed to spiral out of control by successive governments is the «root of all evil» in Australia, the top chief executive has said.

Freelancer.com CEO Matt Barrie said the staggering rise in property prices had far-reaching implications for Australians’ finances and the way they see the world.

His comments come as more young Australians admit they may be waiting for their boomer parents to die so they can get on the wealth ladder – a bleak vision of their future that leaves many feeling guilty and conflicted.

Despite the central bank raising interest rates to keep up with inflation, property prices in Australia’s capital cities have continued to rise by another 20 per cent in the past year.

Mr Barrie said economists considered a house to be «astronomically unaffordable» if it cost more than five times the average wage.

In Australia, the average home in the capital is nine times the average wage. It’s 13 times to tears in Sydney.

«The root of all evil in this country is the astronomical cost of housing. Once you understand all the ramifications of that – it really is the problem at the root of all problems,” Mr Barrie said.

Freelancer chief executive Matt Barrie (pictured) took aim at successive governments that allowed the housing market to inflate wildly and wreak havoc on the economy.

In Sydney, the median house costs about $1.6 million, according to Domain’s House Price Report for the March 2024 quarter, with the firm predicting the median price could reach $2 million over the next three years.

It is the second most expensive city in the world to buy a house after Hong Kong.

Mr Barrie said it was now mathematically impossible for a middle-income household to pay off a mortgage in Australia.

“The median salary is about $94,000 a year, while your take home income is about $5,900 a month after taxes. On a $1.2 million mortgage at current rates, that’s almost $7,000 a month (in mortgage payments).

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«Salaries can no longer pay for houses in Sydney,» he said.

Young Australians may be ‘waiting for their parents to die’

A decades-long housing bubble shows no sign of bursting as housing supply lags far behind demand, leaving many young Australians worried the only route to home ownership is waiting for their parents to die.

Alan, 43, said his legacy now weighs heavily on his mind whenever he sees his mother.

«You know, the only way you get an inheritance is if the person before you – who you love – dies,» he told SBS News.

“How would that make you feel? Because that’s how I feel, and it’s pretty nonsense.’

One 22-year-old Sydney resident, who asked to remain anonymous, said despite earning $75,000 a year, she calculated she would need 27 years to save enough for a down payment on a median-priced Sydney home.

She said she felt despondent when she realized the only conceivable way to afford a house by age 50 was to inherit money after one of her parents died.

«It’s just terrible that people can’t afford to own a house without relying on inheritance… I think it’s unfair and it really upsets me.»

Ari Sharp, a single mother, said she could not afford to buy her own home. However, she feels fortunate that her parents own the four properties that she will eventually inherit.

This financial security gave her the freedom to explore jobs that didn’t pay much.

«I’ve had the freedom to explore the things I really want to do,» she told SBS.

Ari Sharp, a single mother, cannot afford to buy her own home.  However, she considers herself lucky because her parents own four properties that she will eventually inherit

Ari Sharp, a single mother, cannot afford to buy her own home. However, she considers herself lucky because her parents own four properties that she will eventually inherit

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Mr Barrie said an

Mr Barrie said an «astronomically unaffordable» home cost more than five times the average wage, but in Australia the average home in the capital was more than nine times the wage (picture).

Australian wages fall as property prices rise

Mr Barrie said it was remarkable that Sydney was only just behind Hong Kong in terms of housing affordability.

“Hong Kong is a nice, attractive little island that is extremely dense, very small and next to the most populous nation in the world.

«So why would Australia… a relative backwater, 10 to 20 hours as the crow flies from really any major action around the world, have the most expensive housing in the world outside of Hong Kong?»

“It’s not because we’re having more children, because every woman on the planet needs to have 2.1 children to sustain the population. Australia is about 1.5 or 1.6.

«Wages do not grow as housing grows. In fact, wages are currently at their lowest point ever in terms of purchasing power.

“For 20-24-year-olds, the real purchasing power of wages has returned to 2008 levels in the last year. Now the price of everything else is not.

‘So what’s the point? Why Australia has some of the most expensive housing in the world.’

Who is to blame?

Mr Barrie said the blame fell on successive governments for allowing population growth over the past six decades to outstrip housing supply to the point where it was now unaffordable for the vast majority of the population.

He said that all successive governments have played their part, but the Albanian government at a time of unstable economy

He said successive governments had all played their part, but the Albanian government had «goofed up» with its immigration policy at a time of unstable economy (Sydney pictured).

Mr Barrie said the Albanian government could not be blamed for the housing crisis alone, but had not made the situation better by going «full-on» with its immigration policy at a time of unstable economy.

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He said the policy, which brought 518,000 people to the country in the 2022-23 financial year, increased demand for houses and further increased costs.

«House prices have gone up 61 times in 86 years and that’s because politicians have taken the easy route of relentless growth,» Barrie said.

“Rather than talking to engineers, scientists, entrepreneurs about what to do to grow the economy and really build a diversified, strong, complex and sophisticated economy.

«Instead, they pumped the housing market into the mother of all bubbles.»

He said Australians desperate for home ownership were taking on huge amounts of debt that eclipsed rates seen in the US during the global financial crisis.

Homeowners and banks are already twice as indebted to the housing market as Americans were in 2008, he said.

He said high immigration is perpetuating the housing bubble.

“So we’re bringing a lot of people into this country, an astronomical amount of people, and they’re doing it because it’s keeping home prices up.

“The more people grow in an area, the more house prices go up and stay up.

«And the path to easy, relentless growth that governments have is to keep blowing the biggest bubble you can blow.»

Solution?

Economist Yanis Varoufakis told the Equity Mates podcast that an extra one million homes will be needed in Australia over the next three years.

Any measure to increase housing affordability, such as interest rate cuts or government subsidies, will only increase prices, he said.

«The supply is neither private nor public sector… that is, anything that increases demand will make the affordability problem worse,” he explained.

«You should be shouting from the rooftops, ‘We will find a way to build private and public housing.’



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