Australia is among many countries grappling with a housing unaffordability crisis. Soaring property prices have locked many people out of buying homes, forcing them to rent for longer periods.
Research shows declining homeownership rates across several liberal economies, including Australia, Canada, Ireland, New Zealand, the United Kingdom, and the United States.
Young professionals, young couples, single households, migrants, moderate-income earners, and essential workers are particularly affected. Many are pushed into high-rise apartments, dense living environments, or social housing, especially in major cities such as Sydney and Melbourne.
In Sydney, for example, nearly 50% of detached housing is occupied by residents aged 50 and older, a proportion expected to grow further due to limited incentives for downsizing.
This dynamic restricts housing supply for younger buyers and contributes to rising prices and rents across the city.
The growing impact of housing unaffordability
Even before the COVID-19 pandemic, housing affordability was a growing concern in Australia. Sydney and Melbourne, home to around 40% of the national population, rank among the most unaffordable cities in the developed world, based on median house price-to-income ratios. Low interest rates and rising land and construction costs have also fueled household debt.
Living in dense apartment complexes or government-supported housing can carry social and economic consequences. High rents and urban living costs make it difficult for households to save for a home deposit.
Short-term leases and limited tenant control over building management reduce housing security and can negatively affect quality of life, limiting residents’ sense of stability and community.
Alternative pathways to homeownership
Traditional homeownership, where buyers fully own both the house and land, remains out of reach for many Australians due to high deposit requirements and long-term mortgage commitments. As a result, alternative ownership pathways have gained attention.
Government-backed shared equity schemes, such as the Federal Help to Buy program, allow buyers to purchase a home with a government equity contribution of up to 40% for new builds and 30% for existing homes.
State-level examples include Western Australia’s Keystart Shared Ownership scheme and South Australia’s Homestar Shared Equity program.
These initiatives lower upfront costs and reduce mortgage repayments by sharing ownership with the government.
Another option is Community Land Trusts, in which a nonprofit organization owns the land while individuals own or lease homes long-term. This model helps keep housing affordable over time by separating land ownership from housing costs.
Build-to-rent-to-own: A new model for “Forever Renters”
An emerging long-term housing option in Australia is the Build-to-Rent-to-Own (BTRTO) model, designed for so-called “forever renters”, people who want to own a home but lack the financial resources to enter the market.
Under this model, residents do not purchase individual properties. Instead, they acquire shares in the build-to-rent corporate entity without requiring a deposit or traditional bank loan.
Contributions can be as low as AUD $10 per week. Residents receive dividends, which may offset rent, fund the purchase of additional shares, or eventually match the value of their home. Shares can be sold back to the entity, transferred to family members, or passed on as inheritance.
This model closely resembles Europe’s Limited Equity Housing Cooperatives (LEHCs). A 2023 study titled “Housing the ‘missing middle’ -The Limited Equity Housing Co-operative as an intermediate tenure solution for Australia’s growing renter class” highlights LEHCs as a viable middle-ground between renting and owning.
The study argues that this approach could help governments subsidize affordable housing while supporting households priced out of ownership but ineligible for social housing.
According to Architecture & Design, the build-to-rent-to-own model could benefit moderate-income households, essential workers, younger people without access to family financial support, and older Australians approaching retirement without homeownership.
However, for this build-to-rent-to-own homeownership model to succeed at scale, Australia will need clear national guidelines, pilot projects across major cities, and strong governance frameworks to support wider adoption.
Sources:
Is ‘build-to-rent-to-own’ the answer to give renters a toehold in the housing market? (2025, November 13). Architecture & Design. Retrieved from https://www.architectureanddesign.com.au/editorial/features/is-build-to-rent-to-own-the-answer-to-give-renters-a-toehold-in-the-housing-market
Apps, A. (2023, January). Housing the ‘missing middle’ -The Limited Equity Housing Co-operative as an intermediate tenure solution for Australia’s growing renter class. University of New Castle. Retrieved from https://www.researchgate.net/publication/367283609_Housing_the_’missing_middle’_-The_Limited_Equity_Housing_Co-operative_as_an_intermediate_tenure_solution_for_Australia’s_growing_renter_class
What is a Community Land Trust? (2018, September 27). AHURi. Retrieved from https://www.ahuri.edu.au/analysis/brief/what-community-land-trust
Help to Buy Scheme – Federal Government’s shared equity scheme. (2025, August 6). Mortgage Choice. Retrieved from https://www.mortgagechoice.com.au/guides/home-ownership/help-to-buy-scheme/
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