Top Australian CEO exposes the huge problem with Australia – and why it could spell trouble for the country’s future

The founder of a company now worth $130 million says high immigration and unaffordable housing are hampering the creation of innovative companies like his in Australia.

Tim Fung, co-founder of Airtasker, where freelancers complete one-off jobs, said population growth and the resulting unaffordable housing in major Australian cities was having implications beyond the cost of living crisis.

“That aspect probably seems fairer because it’s really just supply and demand,” he told Daily Mail Australia. “As more people want a house, the prices go up.”

However, he said the lack of savings was undermining the ability of budding entrepreneurs to start their own businesses, which in turn was hampering employment.

Sydneys The average home price of $1.5 million is now so expensive that someone would have to earn $226,621 a year to get a loan with a 20 percent down payment.

This borrower would still meet the definition of “mortgage stress,” despite being in the top 2.3 percent of income earners, as more than a third of his income would go toward paying off the loan.

“When you look at the number of houses in the suburbs of Sydney that are worth millions of dollars, you have to compare that to the wages and incomes,” Fung said.

‘It is difficult to establish a connection between the extremely high house prices and people’s income.’

Tim Fung, co-founder of Airtasker, where freelancers offered one-off jobs, said population growth and the resulting unaffordable housing in Australia’s major cities was having implications beyond the cost of living crisis.

Mr Fung, 41, said unaffordable housing meant few could take the risk of starting their own business like he did, as they had put all their savings into buying a home.

Even people who do have the capacity to start their own business don’t see the point in doing so, as they will probably make more money selling their house a few years later, while prices continue to rise.

“It’s so attractive to invest in real estate and your home that it hinders investment in businesses and entrepreneurship,” he said.

‘Many people who make money by setting up a business logically invest that profit primarily in real estate.

“It would be even cooler if most of that investment was invested in the next generation of people who can build companies.”

Mr Fung blamed negative gearing tax breaks for investor-landlords and the 50 per cent cut in capital gains tax for investor-landlords for pushing up house prices.

‘Another contributing factor is the tax regime around property ownership. It is quite favourable to own a home in terms of negative gearing and capital gains tax on a home,’ he said.

‘I have no alternative and I don’t want to claim that I do.

I think there is an existing problem.

In 2023, a net 547,300 migrants moved to Australia, the highest number ever in a calendar year.

During the last financial year, which ended in June, that number fell to a still-high 469,140, ​​Australian Bureau of Statistics figures show.

Sydney’s average house price of $1.5 million is now so expensive that someone would need to earn $226,621 to get a loan with an interest rate of 20 percent.

Mr Fung said Australia’s skilled migration program was too focused on people with university degrees.

“That’s a big problem: we need more skills,” he said.

Yaniv Bernstein, host of The Startup Podcast, agreed.

“The higher cost of living means you have to earn more money to put food on the table, to have a roof over your head, and that makes it less attractive to start something,” he told Daily Mail Australia.

‘Another aspect that startups depend on is the ability to hire employees who are willing to work for below-market wages in exchange for stock, which is very common in the tech sector.

‘You often come across people who would like to work for a startup, but cannot afford the salary cut.

Australia is already losing money due to the higher cost of living, he said.

‘Higher housing costs lead to higher labor costs, which leads to less competitiveness in this global environment.’

Mr Bernstein argued that a less innovative Australia would also be bad for living standards.

“If we only ever rely on a resources economy, we are really missing the opportunity to raise our living standards and create the jobs of the future for Australia,” he said.