Top Aussie CEO exposes the huge problem with Australia – and why it could spark trouble for the nation’s future

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

Tim Fung, who co-founded Airtasker where freelancers bid to do one-off jobs, said population growth and consequent unaffordable housing in Australia’s major cities had consequences that went beyond the cost-of-living crisis.

‘That aspect probably seems more fair because it’s actually just supply and demand,’ he told Daily Mail Australia. ‘As more people want a house, prices go up.’

However, he said the consequent lack of savings was destroying the capacity of would-be entrepreneurs to take a shot at starting their own businesses, which in turn stifled job creation. 

Sydney’s median house price of $1.5million is now so expensive someone would need to earn $226,621 per year just to get a loan with a 20 per cent deposit.

This borrower would still meet the definition of ‘mortgage stress’ despite being among the top 2.3 per cent of income earners, because more than a third of their pay would go towards servicing a loan.

‘If you look at the number of homes that are double-digit, millions of dollars in Sydney suburbs, and you just have to compare that to wages and incomes,’ Mr Fung said.

‘It’s hard to connect the dots between the extreme cost of housing and people’s incomes.’ 

Mr Fung, 41, said unaffordable housing meant there were few were able to take a risk at starting a business like he did, because all their savings had gone into buying a property.

Even those with capacity to start a business see no point, as they were more likely to make money simply by selling their home a few years later, as prices continued to escalate. 

‘It’s so attractive to invest into property and your residence that it stifles the amount of investment that goes into businesses and entrepreneurialism,’ he said.

‘A lot of people who make money in building a business, quite logically, go and invest those gains predominantly in fixed property.

‘It would be even cooler if most of that investment went back into the next generation of people who could build businesses.’

Mr Fung blamed negative gearing tax breaks for investor landlords and the 50 per cent capital gains tax discount, available for investor landlords, for pushing up house prices.

‘The other contributor is the tax regime around property ownership – it’s quite favourable to own a residence in terms of negative gearing and capital gains tax on a home residence,’ he said.

‘I don’t have an alternative and don’t want to state that I do. 

‘I do think that there is an existing problem.’ 

In 2023, 547,300 migrants on a net basis moved to Australia, the most ever for a calendar year.

During the last financial year, covering the year to June, that slowed to a still-high 469,140, Australian Bureau of Statistics figures showed.

Sydney ‘s median house price of $1.5million is now so expensive someone would need to earn $226,621 just to get a loan with a 20 per cent dep

Mr Fung said Australia’s skilled migration program was too heavily skewed towards people with university degrees.

‘That is a big issue – we need more skills,’ he said.

Yaniv Bernstein, the host of The Startup Podcast, agreed. 

‘The higher cost of living means you need to bring in more money just to be able to put food on the table, put a roof over your head, so it makes it less appealing to start something,’ he told Daily Mail Australia.

‘Another thing that startups depend on is being able to hire employees who will work for below market salary in return for equity – that’s very common in the tech sector.

‘Quite often you’ll find people who would like to work for a startup but can’t afford the pay cut. 

Australia is already losing out because of the higher cost of living he said. 

‘Higher cost of housing leads to higher cost of labour leads to less competitiveness in this global environment.’

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

‘If we rely on just being a resource economy forever, we’re really missing a trick to raise our standards of living and to create the jobs of the future for Australia,’ he said.