Publisher/s
Grattan Institute
Publication Date
5 November 2025
Author
Brendan Coates, Joey Moloney, Matthew Bowes

Three-storey townhouses and apartments should be permitted on all residential land in all capital cities as part of a concerted policy assault on Australia’s housing crisis.

Housing in Australia’s major cities is among the least affordable in the world. Restrictive planning controls add hundreds of thousands of dollars to the cost of new housing in our capital cities. For decades, Australia has failed to build enough homes in the places that people most want to live. Now we have a housing affordability crisis that is dividing families and communities and robbing young Australians of their best chance in life.

The key problem is that state and territory land-use planning systems say ‘no’ to new housing by default, and ‘yes’ only by exception.

About 80 per cent of all residential land within 30km of the centre of Sydney, and 87 per cent in Melbourne, is zoned for housing of three storeys or fewer. And three quarters or more of residential land in Brisbane, Perth, and Adelaide is zoned for two storeys or fewer. The upshot is that our capital cities are among the least dense of their size in the world.

Allowing more housing in established suburbs would mean cheaper housing in all suburbs. It would boost Australians’ incomes and quality of life, by letting more people live closer to high-paying jobs as well as transport, schools, and other amenities. And it would mean shorter daily commutes and hence lower greenhouse-gas emissions.

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