Top Australian CEO reveals the huge problem with Australia – and why it could be dangerous for the country's future

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

Tim Fung, co-founder of Airtasker, a platform for freelancers to compete for one-off jobs, said population growth and the resulting unaffordable housing in Australia's major cities had consequences that went beyond the cost of living crisis.

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

However, he said the resulting lack of savings was thwarting the ability of aspiring entrepreneurs to attempt to start their own business, which in turn was hampering job creation.

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

Despite being among the top 2.3 percent of earners, this borrower would still meet the definition of “mortgage stress” because more than a third of his salary would go toward servicing the loan.

“When you look at the number of houses in Sydney's suburbs, which are in the tens of millions, you just have to compare that with the wages and incomes,” Mr Fung said.

“It is difficult to relate the extremely high housing costs to people’s incomes.”

Tim Fung, co-founder of Airtasker, where freelancers bid for one-off jobs, said population growth and the resulting unaffordable housing in Australia's major cities had consequences beyond the cost of living crisis.

Mr Fung, 41, said that due to the unaffordability of housing, few were able to take the risk of starting a business like him, as all their savings had gone into buying a property.

Even those who would be able to start a business do not see the point in doing so, as with prices continuing to rise, they would be more likely to make money by simply selling their home a few years later.

“Investing in real estate and one’s own residence is so attractive that it leads to less investment in business and entrepreneurship,” he said.

“Many people who make money while building a business logically invest those profits primarily in real assets.”

“It would be even cooler if the majority of these investments went back into the next generation of people who could build companies.”

Mr Fung blamed tax breaks for landlords and investors related to negative gearing, as well as the 50 percent rebate on capital gains tax for landlords and investors, for the rise in property prices.

“Another factor is the tax system around property ownership – in terms of negative gearing and capital gains tax on a home, it is quite cheap to own 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, more than ever before in a calendar year.

In the last financial year (up to and including June), this figure slowed to a still high 469,140, ​​according to figures from the Australian Bureau of Statistics.

Sydney's median house price of $1.5 million is now so expensive that someone would have to earn $226,621 just to get a loan with a 20 percent down payment

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

“This is 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 bring in more money just to put food on the table and a roof over your head, so it's less attractive to start something,” he told Daily Mail Australia.

“Startups also rely on being able to hire employees who will work for below-market wages and receive equity in return – this is common in the technology industry.

“You often find people who would like to work for a startup but cannot afford the salary cut.”

Australia already has losers due to the higher cost of living, he said.

“Higher housing costs lead to higher labor costs and therefore to lower competitiveness in this global environment.”

Mr Bernstein argued that a less innovative Australia would also have a negative impact on living standards.

“If we rely on being a resource economy forever, we will miss an opportunity to raise our standards of living and create Australia's jobs of the future,” he said.