How Analysis Paralysis Is Killing Australia’s Housing Affordability
By Paul Westchurch @ Real Estate Daily
March 20, 2018

Australia has a housing affordability problem, just like many other markets across the world. But, the problem doesn’t lie in a lack of inventory. In fact, supply has reached record highs and there’s inventory in all the right places.

So, what is causing the affordability problem? That’s the question that many are trying to answer. Some say that the filtering principle isn’t driving down home prices enough to make them attainable for low-income families. Others claim that house prices are cooling, while others say the blame lies squarely with planning reform. This creates a situation with no clearly defined problem and no clear solutions.

Key Takeaways

  • Australia currently has a bad reputation with regard to housing affordability.
  • Inventory is at a record high, but this isn’t driving down higher-end home prices enough to make them attainable for low-income families.
  • Many say the only way to properly solve this problem is to build more affordable houses to match the price points that are missing on the market.


Australia has a housing affordability problem. There’s no doubt about that. Unfortunately, one of the reasons the problem has become so entrenched is that the policy conversation appears increasingly confused. It’s time to debunk some policy clichés that keep re-emerging.

Is ‘zoning’ to blame?

It can be tempting to frame the housing affordability problem as all about inadequate new supply. According to this argument, the “demand side” drivers – such as low-interest rates and tax incentives for property investment – have combined with population growth in the capital cities to fuel house prices, and new housing construction simply hasn’t kept up. “Zoning” is often blamed. There is little hard evidence, though, to show systematic regulatory constraint.

Supply is at record highs, and in the right places

Australia’s new housing supply per capita is actually very strong by international standards. Over the past decade, supply of new units and apartments has been flowing in job-rich metropolitan areas with dense populations, which are also higher-value locations.

View the original article at The Conversation Australia