Part 2: A Housing Affordability History — 1945 to 1950

Rate Challenge is an Australian mortgage broking business. Our ten-part history of housing affordability draws on official statistics, original legislation and government archives, with comparisons across Australia, the UK, US, Canada and New Zealand. For this chapter, we’ve examined the 1945 housing agreement and original postwar building records to trace how governments tried to turn a severe shortage into homes people could afford. 139

After a hard-fought and well-earned victory, Australians could finally look forward to peace and a better life at home. 147 148

A shortage years in the making

The housing task was substantial. In 1944, the Commonwealth Housing Commission estimated that the country was short of about 300,000 homes. 1

The Depression had interrupted construction. Then the war diverted workers and materials away from home building. By the time peace arrived, Australia had years of lost construction to make up. The shortage was already substantial before the postwar immigration programme began. 1

In 1945, Ben Chifley’s Labor government made a larger public housing system part of the answer. The Commonwealth–State Housing Agreement put federal finance behind state construction of rental homes, with working families on low and moderate incomes among those the system was intended to house. 1 2

Getting the homes built — and the rent within reach

The agreement gave the Commonwealth and the states distinct jobs. The Commonwealth advanced the money, generally repayable by the states over 53 years. The states organised construction, while the Commonwealth also undertook to help them obtain labour and materials. 132

That long repayment period spread the states’ financing costs across decades. The homes would be available to rent, giving tenants a route into housing without first saving for a purchase.

The agreement also tackled the weekly rent. A property’s starting rent covered costs including finance, maintenance and rates. Tenants could then apply for a rebate, providing evidence of their family income. 132

When assessed family income matched the local legal basic wage, the rebate formula aimed to bring rent down to one-fifth of that income, subject to a minimum of eight shillings a week. Incomes above or below that wage followed different rules. 132

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Home building gathers pace

The building recovery soon showed up in the records. In 1945–46, the Commonwealth’s statisticians recorded 15,422 new houses and flats completed. By 1948–49, the annual total had reached 52,684 — more than three times as many in three years. These totals include private builders, government authorities and owner-builders. 140

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Builders were also trying to keep up with a growing population. Arthur Calwell, appointed Australia’s first immigration minister in July 1945, led a programme intended to help develop and defend the country. Alongside assisted migration from Britain, Australia began accepting displaced people from Europe; the first group under that programme arrived in 1947. 22

New arrivals brought workers into an expanding economy and needed accommodation themselves. In New South Wales, early migrant-hostel accommodation often consisted of former army huts and other converted buildings, according to the National Archives. This separate programme provided a temporary place to stay while migrants settled in. 22 141

Construction was recovering quickly, but the task kept growing. The increase in completed homes tells us how much more builders were producing; it does not tell us how much of the shortage had been cleared.

Other countries, different routes into a home

Australia was one of several countries making housing a major postwar task. Some governments concentrated on public rental construction. Others helped buyers and builders obtain finance.

Australia’s agreement used public finance to add rental homes and offered rebates to eligible tenants. Alongside it, home ownership was already widespread: about 53 per cent of households owned or were buying their home in 1947, according to historical figures compiled by the Australian Housing and Urban Research Institute. 132 3

In December 1949, Robert Menzies returned as prime minister, leading the Liberal–Country Party Coalition. The next chapter follows the expansion of home ownership through the 1950s, as more Australians moved from finding somewhere to live to buying a place of their own. 24 3

Data note: The 1944 shortage is an estimate. Completion totals cover the six states and ACT and exclude some dwelling types. Rent provisions describe the scheme’s rules, not what every tenant paid.

Research and calculations: Rate Challenge.

Housing affordability series · Part 2 of 10 · Historical coverage ends in 1949. Research revised 25 September 2026.