Actually, without buying into the union thing, IMO homes are so expensive to build in Australia because of successive governments both federal and state continually provide building incentives. These incentives drive demand to silly levels (WA right now being the classic example). The builders adjust prices quickly and absorb the incentives leaving people wishing to build no better off while the increased demand causes shortages of building materials and labour. Right now people who signed up to build a house for $X are getting two or three price increase notifications from builders saying the agreed price is going up because they cannot buy the materials they need at the price they could previously. So they get it in the neck. The labour shortage means you can get mickey mouse subbies (not always) to do the work because that is all the builders can get and the home owners again often get to deal with that as well. Meanwhile industries like the car industry were left to die because government did not want to subsidise them. Don't see why they let one die and the other not. Unless it is just good politics. Let's not worry about the guy in the street.
There are many elements that go into the property affordability problems.
First one is certainly all the government propping up of the whole industry, it's essentially a government sponsored ponzi scheme at this point with state and federal governments taking turns offering subsidies that never benefit the people they're "targeted" at and only benefit the people they're really designed for...
A second major issue is actually the manipulation of the economy into dual income households, which is heavily promoted by another government subsidised and propped up industry in the childcare provision industry. That second income pretty much just goes to inflating property prices.
The third, and quite possibly the worst of the lot, is the exclusion of main residences from means testing, I mean in fairness this falls into the first part of government manipulation but by practically forcing people to hide as much of their wealth in their home as possible through the social security system you create an incredibly manipulated market that drives market prices far beyond reason. Combine that with the enormous tax concessions around doing the same thing and it just makes sense for the market to be utterly irrational compared to what you're actually buying. Imagine if the government came out tomorrow and said that CBA shares were tax free and exempt from means testing.
Then you've got the childhood narrative of the Australian Dream and all that goes with it and the incredibly "safe" mentality of Australians to take no risks which expands to the financial system in all ways. Australians like to be regulated and babied more than any other people I've ever seen, we'd much rather be told what to do than have to take responsibility or make decisions and we're told to buy property!
Throw in the mass immigration, union wage escalation (kind of their job...), the mining industries highly inflationary impact on construction related wages (much bigger issue in WA than the union aspect) and more than a few other factors and it all makes sense.
Ultimately the successive governments for 30 odd years now have created and expanded a Ponzi scheme in the housing industry and because it's so important it basically can't be allowed to fail at this point so they will continue to manipulate and sustain it.