Insights

Failing to tackle the affordable housing crisis could cost Australia $25 billion annually by 2051

Posted June 27, 2022

SGS Economics and Planning Give Me Shelter

New study demonstrates clear business case for investing in public, social and affordable housing. Businesses urged to contribute to the national conversation.

The Give Me Shelter study authored by SGS Economics and Planning for Housing All Australians shows that if no action is taken on Australia's housing shortfall, the additional cost to Australia in foregone benefits and additional social outlays will reach $25 billion annually by 2051 (in 2021 dollars). The estimated benefits of providing adequate housing reach almost $110 billion.

The study found that decades of underinvestment by governments in "non-market" housing has led to social housing numbers falling to record lows — just four per cent of national housing stock, compared with six per cent in 1996. Over the same time period, the nation's population has risen 25 per cent, placing added stress on an already stretched housing market.

The cost-benefit ratio of investing in more affordable housing is double the cost outlay, which means that for every $1 invested the taxpayer would on average receive $2 in benefits said Dr Marcus Spiller SGS Principal & Partner and lead report author.

Our analysis shows a clear cost-benefit return — a better return than many other major infrastructure projects, including the Brisbane and Melbourne metro projects. Social and affordable housing is essential infrastructure for successful communities. If the pattern of underinvestment is not reversed, future generations of Australians will be left with huge costs.

— Dr Marcus Spiller

The economic modelling indicates costs will result from higher health and mental health service costs, domestic violence services, compromised educational opportunities, anti-social behaviour, and significant productivity losses for services and businesses, with staff unable to find affordable accommodation nearby.

The study found all state and territory governments, except for the ACT, which has the nation's highest rents, have a strong benefit-cost ratio that would justify further investment in public, social and affordable housing. There is a clear demonstration of the underlying business case for greater investment in affordable, public and social housing, with businesses one of the biggest beneficiaries.

Robert Pradolin, Founder of Housing All Australians, urged Australian businesses to lend their voice to the national discussion about how to address the chronic shortage of affordable, public and social housing.

This isn’t just an issue for low-income households, this is also an issue for business in attracting key workers close to where they serve society. It is in everyone’s interest to make this a national priority. This will take 30 to 40 years to fix. We need to view this issue through a long-term lens and consider what society we are leaving our children and grandchildren.

— Robert Pradolin, Founder of Housing All Australians

Join the webinar

Register for an interactive public webinar hosted by Housing All Australians and Committee for Melbourne at 1.00pm on 2 August 2022, featuring the report's authors discussing the findings in more detail.


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SGS Economics Planning Marcus Spiller
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Marcus Spiller

Principal & Partner

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SGS Economics Planning Emily Hobbs
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Emily Hobbs

Senior Consultant & Partner

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