The article by David Llewellyn-Smith in Macrobusiness.com.au (published January 12, 2026) delivers a blunt, pessimistic verdict on Australia's housing crisis: affordability has collapsed uniformly from "surf" (coastal cities like Sydney) to "turf" (regional paddocks and midsized areas). Home ownership is no longer realistic for most young Australians, regardless of location, and this fuels deep social disintegration.
Key Insights from the Cotality Housing Affordability Report (Late 2025)
The piece references the Cotality (formerly CoreLogic) Housing Affordability Report from late 2025 (based on September 2025 data), describing it as a "total social disaster." Cotality's findings confirm record-low affordability:
National home values surged 8.6% through 2025, adding about $71,400 to the median dwelling value.
The median dwelling value-to-income ratio hit extreme levels (around 8.2x nationally), with houses showing worse deterioration than units.
It now takes more than a decade (often 11+ years) to save a 20% deposit on a median house in most capital cities.
Mortgage serviceability burdens are at record highs, with households needing a historically large portion of income for repayments.
Affordability metrics worsened overall, with short-term corrections unable to deliver sustained relief — echoing the article's point that cyclical fluctuations won't fix the structural mess.
Cotality also notes demand shifting to lower-price segments due to these pressures, while regional markets (e.g., strong growth in WA and QLD regions) have been more resilient but still face tightening.
Here's a snapshot of the national trend in 2025 (based on Cotality Home Value Index data):
Strong annual gains driven by population inflows and initial rate cuts.
Late-year softening in Sydney and Melbourne (slight monthly declines in December 2025), but overall upward momentum persisted until affordability and rate uncertainty bit harder.
The Nationwide Spread: No Escape Left
Llewellyn-Smith argues the crisis is no longer confined to expensive capitals — the "surf to turf" collapse means even Adelaide's "boredom," Perth's "terrible driving," or remote paddocks offer no refuge. When prices rise in big cities, demand spills over:
Buyers and investors chase "comparatively inexpensive" areas (midsized capitals, regions, Darwin).
This drives catch-up price and rent growth there, quickly eroding any affordability advantage.
Result: Uniform unaffordability, with no "next most affordable market" to flee to.
This dynamic is backed by Cotality observations of regional outperformance in 2025 (e.g., combined regional values up 9.7% vs. capitals' 8.2%), but with signs of slowing as pressures mount.
Immigration as the Core Driver
The article pins the blame squarely on the mass-immigration-led economy. High net overseas migration (peaking post-COVID) creates relentless demand that outstrips supply, making the system "immigration/housing-dependent":
Any price dip (like recent softening in Sydney/Melbourne) triggers monetary easing, reigniting growth.
The post-COVID surge under Albanese was massive: NOM hit records like 538,000 in 2022-23, then moderated to 306,000 in 2024-25 (still elevated vs. pre-pandemic norms of ~200-250k).
This demand overload, timed with construction lags and high costs, supercharged the mismatch — turning chronic supply issues into an acute, nationwide crisis.
While supply bottlenecks (zoning, approvals, costs) predate this, the unprecedented intake amplified them dramatically. Without curbing high migration levels significantly, sustained affordability improvements seem unlikely — the economy rebounds on population growth, locking in the cycle.
Broader Social Fallout: The End of the Australian Dream?
For young Aussies, the stakes are existential:
Stagnant wages + deteriorating services (from "crush-loading") + housing as a "privilege" = no aspiration left at home.
Home ownership rates for younger generations have plunged: Only ~36% for 25–29-year-olds and 50% for 30–34-year-olds (recent estimates), vs. much higher for older cohorts.
This creates a "ribald class war" on youth, eroding social cohesion — why expect unity when the system offers no psychological base?
The article's thesis rings true in the current data: 2025 delivered strong gains despite affordability records being broken, and 2026 forecasts suggest continued rises (albeit slower, 5–10% in capitals per some analysts), with no quick fix. The dream of owning a home feels increasingly out of reach for a generation, thanks to policy choices that prioritised population-driven growth over building enough homes. Reversing this requires confronting high migration head-on alongside aggressive supply reforms — otherwise, the "surf to turf" collapse deepens into something far more permanent, the end of the great Aussie dream. And it has all been let happen because of the cult of immigration. Australia becomes, just another rundown motel.
https://www.macrobusiness.com.au/2026/01/surf-to-turf-housing-affordability-collapses-everywhere/