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State budgets tinkering around the edges of our housing crisis

By Graham Young - posted Thursday, 4 July 2024

State budgets have come and gone leaving their individual housing markets more or less untouched.

That's both strange and a bad thing. In Australia, housing is the least affordable it has been in living memory, and probably ever, and is one of our most pressing problems, meaning politicians should be paying attention to it.

It is leaving a whole generation without hope of a stable financial future, like their parents had.


International property monitor Demographia just recently published its 2023 report and rated Australia the second least affordable country surveyed after Hong Kong.

Until last year, Demographia scaled cities from "Affordable" to "Severely Unaffordable."

In 2023 they introduced a new category "Impossibly Unaffordable," which is where our three eastern seaboard metropolises are now classified.

It seems to be partly an Antipodean problem, as New Zealand was just behind Australia, and both were well ahead of other Anglosphere countries like the United States and the UK. Singapore was the most affordable.

There are three contributing factors to our high house prices-huge immigration, Reserve Bank interest rate policy, and restrictions in supply of land, labour, and materials.

Immigration and interest rates are outside the control of state governments, but they have a significant role to play in the supply of land.


Yet, with the exception of David Crisafulli, Queensland's opposition leader, it was barely mentioned by any treasurer or their opposite number. In fact, many of their budget measures will make the crisis worse.

What's weighing down our housing market?

My think tank, the Australian Institute for Progress, produces a quarterly Australian housing affordability index for each of the six state capitals as well as Darwin and Canberra. We can draw a number of conclusions from it.

The first is that there is a 70 percent, or better, correlation between interest rates and house prices.

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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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