Australia's housing policy?

This could be a very short yarn because despite the almost daily media reports of a housing boom or bust (depending on which media you read) and despite regular jawboning on housing prices by no less than the Reserve Bank, and despite tumbling affordability for young families and talk of generational lock-out from the housing market, we don't actually have a housing policy as such. Nor does it seem much of an official view.

It's almost remarkable that the Federal Government has resisted entering the debate about housing when the topic is so nationally contentious. It is one thing to say that in principle, housing policy is really a matter for the states (which largely it is) but it is another to resist the political urge to intervene in a subject which is so white hot as a BBQ stopper everywhere, from Martin Place Sydney to Moorooka Brisbane.

Even the chiefs of our major banks can't seem to agree on whether parts of the market are overheated or not, whether negative gearing is contributing to problems in some parts of the market or not, or whether foreign investors are responsible for driving prices up in places like Sydney. Nearly every bank chief has expressed a view and to my way of thinking there has been very little consistency in those views. That in itself is extraordinary.

Some like the Comm Bank's David Murray have suggested negative gearing is a problem while Westpac's Gail Kelly says not. Kelly is one of many resisting moves to introduce tighter capital buffers on bank lending as seems likely to be recommended by the Financial Services Inquiry. Various spokespeople for the Reserve Bank have been muttering their concerns about the housing market in Sydney and Melbourne, perhaps hoping that this voodoo may cast some sort of spell over the market and cool things down.

But which parts need cooling down, if they do at all? Plenty of commentators talk about 'the real estate market' as if it's one thing. Nothing could be further from the truth. While parts of Sydney are apparently red hot and Melbourne has been heating up, Brisbane is well behind, with perhaps the exception of some inner city apartment locales. As for Hobart or Adelaide or countless regional cities, it's quite the opposite. Try telling someone on the Gold or Sunshine Coast that the market's overheated and they'll laugh at you.

The problem with big sticks like those wielded by the Reserve Bank is that they have no capacity for regional differentiation. So if they do move to cool things down in places like Sydney, that could have calamitous effects on markets where things never heated up in the first place. Equally it could kill off the only part of the market that seems to be employing people at the moment: without all those high rise cranes on apartment projects, there's not a lot of other activity in the property and construction sector – a big employer in Australia.

Add to this the oversupply of commentary on an almost daily basis. For sticky long term assets like housing, analysis ought to be based on long term performance. The high transaction costs of trading real estate assets make this even more a reality. But the digital media's appetite for stories that punters will click on is such that they now print almost anything submitted on the topic of housing prices. So much so we're getting told, with great authority, that "house prices in city X moved up 0.3% in the month of October but fell by 0.1% in city Y." Pfft. Even that paragon of conservative market reportingThe Australian Financial Review now devotes a large chunk of space every Monday analysing in detail what happened at auction clearances the weekend before. Pur-lease!

It's so ridiculous that in the space of time since our own house went under contract to settlement, I think we'll have been through a boom, a bust, and a boom again. Who knows, it settles in two weeks, anything could change again according to the media.

On top of this, Liberal MP Kelly O'Dwyer, who chairs the House of Representatives Economics Committee, is spearheading an investigation into foreign investment in Australian real estate. It's always good to give the punters someone to blame and foreigners are always good targets so this sort of witch hunt makes a pretty regular appearance in Australian public policy. Some of you would remember the early 1990s when there were campaigns against Japanese investment. Ironically, they were led by a bloke called Bruce Whiteside – himself a Kiwi resident on the Gold Coast and this at a time when Kiwi's were the largest foreign buyers of Australian real estate outside the poms.

It strikes me that this it is more important now to have a national view on housing policy settings than perhaps ever before. This doesn't mean we need a Department of Housing (since when did more bureaucrats actually make anything better?) but some effort at a national level to bring some consensus to the issue would be helpful. Here's why:

• The Governor of the Reserve Bank is worried and says so - often - that housing policy settings aren't working
• The chiefs of our major banks disagree about whether there is a problem or not and what ought to be done, or not
• Most of the respected (or noisiest?) commentators or industry experts are in heated disagreement about housing markets and housing policy
• Global observations from groups like the IMF and World Bank have expressed caution about Australia's housing prices (not that they're experts but it is unsettling when they chime in)
• There is an undeniable affordability problem for young families in major cities leading more to renting than at any time since WWII and some of those who buy often enter significant financial stress as the price

I could go on, it's potentially a very long list.

In fairness, Treasurer Joe Hockey has made a number of comments about the issue – denying talk of a bubble as 'lazy analysis' and hosing down talk of regulatory intervention. He has rightly (in my view) identified supply side constraints as a significant problem via the planning policies delivered by various local and state planning agencies – policies beyond the regulatory reach of the Federal Government.

But is 'Keep Calm and Carry On' enough of a policy response when so much is at stake?

Is there anything wrong with our national government entering the fray to settle debate and point a way forward?