The Forum > Article Comments > Economic factors affecting the housing market > Comments
Economic factors affecting the housing market : Comments
By Saul Eslake, published 19/3/2007Australian residential property prices have shown remarkable resilience despite the end of the boom.
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“...those who believe that a lower population growth rate should be pursued as an objective in its own right should support measures designed to increase the growth rate of per capita income…”
Yes indeed! Along with better wealth distribution. Currently in Australia we have high economic growth that just simply isn’t translating into significant average per-capita improvements in overall quality of life, even with the minerals boom.
“However I get the impression that 'Guy V' and 'Ludwig' also favour the pursuit of lower, and possible even zero or negative, per capita income growth as an objective.”
Not at all. Real economic growth should continue. But it needs to lead to significant per-capita improvements and not be just providing approximately the same quality of life for ever-more people, and huge wealth gains for a small fraction of the populace.
Economic growth needs to be based progressively more on sustainable industries and an innovation-oriented platform, and less on non-renewable primary industries and potential renewable industries that are being overexploitative. And it most definitely should NOT be based on continuous expansionism, ie on population growth. In short, it MUST sit within a sustainability framework.
Economic growth that is based on technological advances can continue almost indefinitely.
We need to separate the two halves of ‘growth’. They are very different things. One side of it is the expansion aspect while the other side is the good development aspect. The first is highly undesirable within a scenario of stressed resources and a damaged environment, while the second is highly desirable.
And we need to get right away from the notion that economic growth per se is the bottom line, and that we must have high population growth in order to maintain high economic growth.
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