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If government is serious about tackling the housing crisis, it must help private investors

By Graham Young - posted Friday, 14 July 2023

You have to wonder whether Australia's federal and state Labor governments are trying to drive private landlords out of the residential market.

It would be perverse behaviour when Australia has a housing rental and home ownership crisis, but the only alternative explanation is incompetence.

In the first place, they've set the country up for housing failure.


Net migration over the next two years is set to be 700,000. Normally it would have been something like 470,000 over the same period.

An additional 230,000 net will require around 46,000 additional dwellings every year at 2.5 people per dwelling.

That would be around a 25 percent increase in building starts; at the same time, the Housing Industry Association is predicting a decrease in building activity.

But it takes around a year at the moment to build a new house or unit block, so even if the industry could cope with the additional demand, we are already behind before it could even conceivably ramp up.

This has to be a prime driver behind the increase in rents, which is also driving an increase in housing prices, even as interest rates go up.

And it combines with restrictive planning laws and onerous taxes and charges on developers (which are passed on to purchasers), making it difficult to bring extra affordable supply onto the market, particularly as inflation and supply shortages are putting up the price of labour and materials.


There is no shortage of land in Australia, so this crisis is entirely manmade.

Official statistics capture the picture at the end of last year when it was estimated 640,000 households were under housing stress (defined as spending more than 30 percent on rent or repayments).

This would have surged recently, with rents up 11.5 percent on average in Australia's capital cities last financial year, and home loan interest rates have jumped 50 percent over the same period.

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This article was first published by the Epoch Times.

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About the Author

Graham Young is chief editor and the publisher of On Line Opinion. He is executive director of the Australian Institute for Progress, an Australian think tank based in Brisbane, and the publisher of On Line Opinion.

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