The Looming Energy Crisis: How Rising Gas Prices Could Shake Australia’s Housing Market

The Looming Energy Crisis: How Rising Gas Prices Could Shake Australia’s Housing Market

 By the end of 2025, for the first time in history, Australia’s east coast will begin importing liquefied natural gas (LNG) to meet domestic demand. This will directly link local gas prices to international markets, leading to a dramatic price surge. The Queensland gas export industry, which already prioritises overseas buyers, will further tighten supply to drive prices even higher.

What Does This Mean for Energy Costs?

•  Historic price surge: Australia once thrived on $3 per gigajoule (GJ) gas. Since exports began, that cost has jumped to $13.74GJ. Once LNG imports begin, we could see prices spike to $25GJ—an 830% increase over a decade.
•  Electricity price explosion: Gas-fired power determines the marginal electricity price on the east coast. This price jump could lead to a 273% increase in electricity bills.
•  Hidden costs to taxpayers: Governments have softened past energy shocks with subsidies, but those come at the cost of higher taxes. Even if direct bills stay lower temporarily, Australians are still paying the price through tax increases.

The Perfect Storm: Economic Impact in 2026-2027

The Albanese government has pledged to extend energy rebates, but the opposition, led by Peter Dutton, has indicated plans to remove them and instead focus on increasing domestic gas supply. However, the reality is that major gas reserves are already controlled by multinational corporations, leaving little room for new supply outside of their control.

If rebates are removed and prices are left unchecked, Australians will face an economic shock equivalent to the combined effects of COVID-19 and the Ukraine war. This could add 4-5% to the Consumer Price Index (CPI), with further inflationary effects on food, building materials, and everyday essentials.

Worse still, Australia’s reliance on imported US dollar-denominated gas means that any depreciation of the Australian dollar will further increase energy costs. Global economic downturns—whether caused by war, financial crises, or recessions—will now have a direct and immediate impact on local gas and electricity prices.

How This Affects Homeowners and Investors

If energy costs spiral out of control, the RBA will struggle to lower interest rates, even during economic downturns. This means:

• Higher mortgage rates for longer: Borrowers will continue to face higher repayments, straining household budgets.
•  Reduced property demand: Fewer buyers will be able to afford homes, potentially causing price stagnation or even declines.
•  Increased construction costs: Developers will face higher material and energy expenses, slowing new housing supply and worsening affordability.
•  Economic instability: With both fiscal and monetary policy constrained, future economic crises could hit property owners harder than ever before.

The Solution: Government Action on Gas Prices

Avoiding this crisis is possible—but it requires decisive action. The federal and state governments must work together to implement the following policies:

•  National Gas Reservation Policy: Enforce a 15% domestic reservation rule to ensure Australian gas remains affordable for local consumers before being exported.
•  Export Tax on Gas Profits: Implement a levy that taxes 100% of every dollar earned above $7GJ on exported gas. This would not only bring domestic prices down to manageable levels but could also generate $10 billion in additional government revenue.

Time to Act: Protecting Australia’s Future

Despite these clear solutions, political leaders remain hesitant to take action. Pressure from the oil and gas lobby—comprised of multinational corporations and foreign buyers—continues to influence decision-making. If you own property or rely on affordable energy, now is the time to demand change.

Write to your local MP and urge them to take immediate steps to secure Australia’s energy future. Without action, the housing market—and the broader economy—could be heading toward a perfect storm in 2026 and beyond.