Well spoken Mercurius. Population growth has nothing to do with the problem. There is no significant correlation between real house price increases and the rate of immigration. But let's not let this get sidetracked. The issue is housing affordability, not xenoph... oops, I mean immigration.

Property, whether we like it or not, is part of our economy.

The suggestion that "housing ... is [a] basic human right" appeared on the "let's have a Bill of Rights" thread too.

Where does this all suddenly come from? Isn't our economy based upon capitalist principles? When did it suddenly become tacky to own, or aspire to own, ones own property?

But more to the point, underneath the warm-fuzzy "wouldn't it be nice if everyone was nice to each other" logic, the whole idea is preposterous beyond belief.

If we suddenly decided that owning a home is a basic human right, where does that leave the millions of people who have scraped and scrimped and sacrificed to buy their own? Should they be compensated? Or perhaps they should be punished under the principle "property is theft"?

If we decide that owning a home is a basic human right, how do we allocate them? Say the government builds "citizens houses" in Broome, does it then have the right to send the citizens there to occupy them?

Having a "crisis of affordability" is one thing. Turning society upside down in a futile attempt to "solve" it is another.

The entire article is misguided idealism, of the kind one would expect from a bright eleven year old who also thinks that all wars could be avoided if people just talked to each other.

I'm going to posit that people seek to maximise their standard of living. I doubt many will disagree with me.

Ones home is a major determiner of that standard, so it seems to me that people will tend to spend as much as they can afford (or think they can afford) on their housing, whether it's by way of buying a house, or renting somewhere.

The mechanism of supply and demand then requires that house prices and rent levels will be set such that they remove from the population all of their income except that which they otherwise need to provide a standard of living commensurate with the standard provided by their housing.

From that perspective it seems apparent that nothing that a government does by way of alterations to the taxation system can change the situation. At most, it can shift the division between owner occupier housing and rented accomodation, but causing economic dislocation along the way.

That said, the market is inefficient, in that it does not result in the best use of the accomodation. In particular, people who have retired continue to occupy housing relatively close to the city that could otherwise more usefully be occupied by people who are working in the city. The obvious answer to that is to force retired people to move away from the city centres, either directly through statutory compulsion, or by taxation. Of course, it's politically impossible, and will never happen.

As something of an aside, it bothers me that the inflation rate is managed by the RBA by way of interest rate changes. No doubt it's convenient for the government that they can apportion the 'blame' to someone else when rates go up (while still taking the credit when they drop), but it does not spread the pain equally. If heat needs to be taken out of the economy, it would be more efficient to do that by raising tax rates. Again, it's not going to happen.

Our own state Govts have been the biggest offenders in pushing up the cost of houses with stamp duty,taxes,over regulation,just plain stupidity and woeful planning.

Firstly release more land in the outer suburbs and service them with rapid transport systems.Stop employing more bureaucrats and put the money into infrastructure.We have 3 times the number of PS per head compared to NZ.There in lies our greatest waste of public monies.Let young people access their super as a deposit for their first home.

Sydney has painted itself into a corner if insufficient,ill planned transport infrastructure.Our State Govts just push for more urban consolidation with no planning for transport.If our traffic continues to be in a state of gridlock,business will leave and this city will embark on the slow process to decay.

It takes a really smart Govt to take the most prosperous State in times of economic boom and turn it into a basket case.

We not only have a woeful lack of talent,but also lack people with the courage and a vision for the future.

This is article is much the same as one by Kim Carr (31/7). I repeat my comment from there:

Government interference in the housing market to improve affordability won't work; it will cause prices to rise further by increasing demand, so erasing the intended benefit. That's what happened with the first home buyer's grant. Abolishing negative gearing won't work either. Keating tried it in 1985, only to find it created a severe rental property shortage, hurting the very people the policy was supposed to help. The fact that house prices rose so much and so rapidly from 2000, it is inevitable that they will fall. This is already happening here in Sydney, where I don't see prices rising for at least 4 years. As an investment residential property is hopelessly unattractive. To attract a rational investor, either house prices must fall or rents must rise.

There are other options to improve affordability in the long term that actually work:
(1)Abolish stamp duty, which encourages house price inflation as vendors 'pass on' the stamp duty that they originally paid to the purchaser.
(2)Eliminate immigration. As long as migrants continue to come here, there will be less and less land per person. Prices must therefore keep rising. Without immigration and a zero population growth rate, land prices will remain static.

Arjay and ghaycroft have both raised the furphy that housing unaffordability is a simple matter of supply and demand. Just get the State Government to release more land and bingo, houses will be more affordable.

Today the Sydney Morning Herald published another in a series of articles about the house price crash in Sydney's west and south-west. If the State Government were to release more land for housing, where would a lot of it be? That's right, in the west and south west. Where there is a supposed 'land drought' at the same time as falling house prices? Does that support the 'release more land and reduce prices' argument? Hardly.

At the same time, prices are rising again in other parts of Sydney, such as the eastern suburbs, the inner west, the upper north shore, so can the 'release more land' brigade explain how releasing land on the outer urban fringes would make houses more affordable in these established suburbs? The market for new land and houses in the urban fringes and the house market in older suburbs are and always have been separate markets. There is no reason to believe that releasing more land would have much impact on house prices across the major cities.

This 'release more land' call was being made just last week by none other than the Prime Minister. Couldn't be anything to do with him trying to escape blame for the impact of the latest interest rate rises, now could it? It's all the State Governments' fault, apparently. And the fact that the State Governments are all of a different party to the PM, pure coincidence of course.

Why do people buy this political spin?