Key takeaways
In 1981, social housing made up nearly 5% of all homes, a public investment in national stability.
By 2025, that share dropped to just 4%, even though the total housing stock more than doubled.
Australia now has 128,000 fewer social homes than it would if the 2001 ratio had been maintained.
Government spending pivoted from constructing social housing to rent assistance programs.
In 2023–24, the Commonwealth spent $5.5 billion on rent assistance, but only $1.9 billion on housing and homelessness services.
Rent assistance supports tenants temporarily but doesn’t increase supply, worsening affordability over time.
A record 16.7% of property investors sold at least one property in 2025, up from 12% in 2023.
Only 42% of these homes stayed in the rental market, with most becoming owner-occupied.
Regulatory burdens, rising land taxes, and compliance costs are making residential investment less appealing.
Over four decades, Australia built 6.7 million new homes, yet only 223,000 were social dwellings — just one in thirty.
Australia’s housing system is caught in a slow-moving crisis.
Over the past four decades, the total housing stock has grown rapidly, but social housing has stagnated, and now, even the private rental market that filled part of the gap is under strain as more investors sell up.
And the result is that we have fewer affordable homes, a shrinking rental supply, and rising rents for millions of Australians.
1981: When social housing was a public asset
Back in 1981, Australia had 4.67 million dwellings in total, of which 228,938 were public housing dwellings, nearly 5 % of the national stock.
At that time, the Commonwealth–State Housing Agreement funded steady public construction, and social housing was considered a national investment in stability and productivity.
Note: In 1981, one in twenty Australian homes was social housing. It was a public asset, not a safety net.
2001: Growth slows, but balance holds
By 2001, Australia’s housing stock had expanded to 7.07 million dwellings (+51.5 %).
Social housing also grew to 361,482 dwellings (+57.9 %), keeping pace with population growth and maintaining its 5.1 % share of total housing.
But the balance began to shift. Governments started diverting funds from construction toward rental assistance programs like Commonwealth Rent Assistance (CRA), assuming the private market would supply affordable homes.
Now in 2025, the total number of dwellings in Australia reached 11.37 million (+60.8 % since 2001), yet social housing grew by just 90,518 dwellings (+25.1 %), falling to only 4.0 % of total stock.
That’s a shortfall of around 128,000 dwellings compared to what we’d have if social housing had maintained its 2001 share.
| Period | Total dwellings (start → end) | % Growth (total) | Social dwellings (start → end) | % Growth (social) | Social housing share | Change |
| 1981 → 2001 | 4.67 m → 7.07 m | +51.5 % | 228,938 → 361,482 | +57.9 % | 4.9 % → 5.1 % | +0.2 pp |
| 2001 → 2025 | 7.07 m → 11.37 m | +60.8 % | 361,482 → 452,000 | +25.1 % | 5.1 % → 4.0 % | –1.1 pp |
| 1981 → 2025 | 4.67 m → 11.37 m | +143.6 % | 228,938 → 452,000 | +97.4 % | 4.9 % → 4.0 % | –0.9 pp |
If social housing had stayed at 5 % of all dwellings, Australia would now have 580,000 social homes, not 452,000.
That 128,000 home gap represents tens of thousands of families now competing for more affordable housing.
Less public spending, more rent assistance
In 2023–24, the Commonwealth spent $5.5 billion on Commonwealth Rent Assistance and just $1.9 billion on direct housing and homelessness services.
Rent assistance helps tenants pay rent, but it doesn’t build homes.
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If private property investors don’t supply enough dwellings, or sell them, these subsidies simply fuel rent inflation.
Many government incentives to build low cost housing including NRAS have not filled the void and only serve to artificially increase the absolute numbers in the short term.
As is evident many NRAS investors exit the scheme at the end of the 10 year requirement given its unsustainability.
Regulation, red tape, and the investor retreat
While governments have pulled back from building social housing, the private rental market is also contracting.
An avalanche of new regulations, taxes, and compliance obligations, from rent controls to land-tax hikes and energy efficiency mandates, is driving many investors out of the market.
The 2025 PIPA (Property Investment Professionals of Australia) Investor Sentiment Survey found that:
- 16.7 % of investors sold at least one investment property in the past year (up from 14.1 % in 2024 and 12.1 % in 2023).
- Of those sold, only 42 % were purchased by another investor; the rest went to owner-occupiers or first-home buyers, permanently removing them from the rental pool.
- 65 % of those who sold had owned the property for less than 10 years, and 20 % for less than three years.
- 44 % cited rising holding and compliance costs, and 35 % cited increased land taxes as key reasons for selling.
(Source: PIPA Investor Sentiment Surveys 2023–2025)
Note: Investors are voting with their feet. Regulation and rising costs are making residential housing less attractive compared to other asset classes.
How many investment properties are being sold?
- 2024 investor sales: It has been estimated that 130,000–150,000 dwellings, roughly 25–29 % of all residential sales were sales by property investors taking properties out of the rental pool.
- PIPA cross-check: With ~1 million investors nationwide and 16.7 % responding to the survey saying that they sold a property in 2025, the implied number of dwellings sold is ~167,000, consistent with the upper range above.
- Forecast (2025–2028):
- Base case: ~120,000–150,000 investor sales per year
- High-exit scenario (rising regulation): 140,000–170,000 per year
- Lower-exit scenario (stabilised policy): 100,000–125,000 per year
Critically, because fewer than half of sold properties remain as rentals, the net loss of rental stock is likely 50,000–80,000 homes per year.
Consequences for renters
With social housing declining and private rental supply shrinking, renters are trapped between two pressures:
- Fewer affordable dwellings overall, and
- Intense competition for the remaining private rentals, which drives rents higher.
The natural conclusion is stark: if governments don’t rebuild social housing and investors keep leaving the market, renters will pay more for less, and the rental crisis will deepen.
A two-sided supply problem
Between 1981 and 2025, Australia added 6.7 million homes, but only 223,000 social dwellings — about one in every 30 new homes.
Now, as private investors retreat, the pressure is compounding.
To fix the problem, Australia must:
- Rebuild social housing at scale, treating it as essential public infrastructure.
- Rebalance investor policy - streamlining regulation and ensuring that residential housing remains an attractive, viable asset class.
Without both, the next decade could see even fewer rental homes and ever-rising rents, a lose-lose outcome for both investors and tenants.
