Richard Tomlinson writes in The Conversation (10.4.17), summarising the arguments of several housing experts who largely agree on which government policies are causing negative distortions in the property market and the wider economy.
'The Conversation has published many articles by Australia’s foremost academics on policies that affect housing. In the lead-up to expected announcements in the federal budget in May, we review the arguments in the articles since January 2016 – 81 were identified, of which 58 concerned housing policy.
'This article focuses on the most frequently mentioned aspects of housing policies and other policies that had unintended effects on housing – fiscal policy, land supply and planning approvals, and affordable housing. A concern with politics and inequality was a consistent theme. Recent articles have discussed a possible housing bubble.
'... It is hoped this article leads to some introspection regarding the causes of housing affordability problems. Australia has for too long persisted with the mantra of housing prices being caused by problems of supply.
'This is not a political statement. It was Labor that established the National Housing Supply Council. The emphasis on supply is so very misleading. The focus should be on the functioning of the housing sector and on those unable to enter the housing market.
'It is hoped as well that this article has caused some concern regarding the macroeconomic distortions and productivity costs associated with housing policies and, more to the point, policies that are not intended to affect housing. The failure to resolve housing issues, besides being thoroughly unfair, is also a failure to improve the productivity of Australia’s economy.'
Coalition won't budge despite chance to tackle housing policy
Greg Jericho comments in The Guardian (9.4.17) on federal housing policy, arguing that, as this year's budget looms and the political ground has shifted on the Coalition, the Turnbull government remains firmly rooted in the past.
'With just over five weeks to go till the budget, the government appears locked into defending Malcolm Turnbull’s old statements and positions, rather than reacting to issues in a way that could help deliver a budget that signals it is more in tune with the policies and politics of a post-financial crisis world.
'In the past couple of weeks, the housing policy issue has undergone a change. For a long while now, the talk has been all about affordability – what to do to help those looking to buy their first home. Now the focus has shifted to a housing bubble.
'The two issues are clearly linked – the reason housing affordability is such an issue is because prices in Sydney and Melbourne have been rising much faster than incomes. That the rise has been occurring for several years brings into question just how sustainable the market is.
'And so the shift is not just about making housing more affordable, but taking out some of the air in the market without bursting the bubble. This puts the government in a tricky spot – although it’s one of their own making.'