Buildipedia Review - The Great Divide, Australia’s housing mess and how to fix it by Alan Kohler

I just finished reading Great Divide by Alan Kohler, and it’s a brilliant piece that demystifies the current state of housing in Australia. The main takeaway? The mess of regulations we’ve got in place is almost perfectly designed to keep housing prices high. It’s effectively a perfect storm as Kohler puts it, with policies and restrictions that somehow manage to discourage affordability at every turn.

The way Kohler lays it out, it’s almost ironic. We all agree on the need for more affordable homes, but the regulatory environment makes it nearly impossible to build them. You’ve got strict zoning laws, council restrictions, and all these planning rules that drag out approvals and limit development. It’s like the system’s rigged to keep costs up. Developers face this maze of regulations that takes time, money, and resources to navigate—and that all drives up the final cost, which means fewer affordable housing projects get off the ground.

Then there’s the issue of inconsistent policies across different states and councils. One area might allow for a bit of medium-density housing, but cross the road, and suddenly, you’re in a place that bans it altogether. This patchwork approach is inefficient, driving demand up in some areas while prices skyrocket in others. The result? People are forced to move to places that aren’t even well-connected or close to their work because it’s the only option they can afford.

Affordable housing projects don’t get the kind of financial backing they need to be viable. Bank profitability is pegged to rising house prices and there is an almost religious devotion to climbing the property ladder which is a universal aspiration

There’s an undertow of exacerbation from Kohler. Legislation and Regulation have created a market that works for the wealthier two thirds of Australians who own property, while the rest - younger people particularly - are left scrambling for options. He argues we don’t need another enquiry - just read the enquiries published to date.

Housing affordability is slipping out of reach, and if things don’t change, it’s only going to get worse. For anyone interested in understanding why housing has become so unaffordable, Great Divide is an eye-opener. Well written, well researched and pulls no punches.

If you found this interesting, there’s more! Read our blog titled "2 key things Alan Kohler's missed in his excellent Essay - Great Divide - Australia’s Housing Mess and how to fix it", and listen to our podcast episode Decoding the housing puzzle with Simon Croft from the HIA.

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