Great and well researched article.
Land prices are also impacted by taxes. As much as 43% all up, in some cases.
Some very lazy unimaginative investors believe you can make money just by buying and selling land or houses and make money while sitting/laying around the pool, sipping Latte.
And as long as govts and developers collude to create seeming scarcity, by dribbling out supply, they will.
[Sydney is now the most expensive city in the world. Govts and developers in bed together? Who would have thought?]
The current global economy has probably brought this practise to a halt or fraught with danger.
Margins need to be replaced with volume; if people want to continue SAFELY making money out of real estate!
And negative gearing needs to be replaced with positive gearing. It has created welfare for the rich and untenable demand on residential housing.
Many investment properties, would come back on the market if we but replaced this extremely expensive Govt largesse, [5 billion plus per and counting,] with an adjusted for inflation, capital gains tax!
Rhrosty.

Excellent article Bryan. Whilst you state the obvious about developers, the withholding of land, drip feeding, collusion from the political forces, not many seem to see or want to see this side of things. Corruption has become endemic in our society, and it will take an earthquake of huge proportions to root it out.
A simple remedy would be to get the government out of the development business and to get local government rates back onto land values. There are so many privileges for developers and this should not be so. Its like society is walking around with a great big knife between its ribs. And developers are twisting it.
You point out that, irrespective of the political tenor of the gov't. the same events are perpetrated. People have been saying for years that there is little if any difference between them. Your point emphasises this, and the sufferers are the people. This shows up in the rates of violence in the community and the numbers unable to find housing or other accomodation and the general corruption so evident.
The land question is the most important question. We just need people to look and listen and see how and why, they are being stolen from.

This is one of those frustrating conversations where noone wants to put all sides of the issue up for discussion. We talk about "affordability" or some such rubbish, but noone will acknowledge that affordability really should mean cheaper housing/land. And here's the problem: those *with* property want to see it go UP. Those *without* property want to see it go DOWN. Both groups vote but I think the property holders must either be larger or more influential because they win every time.

Easy recipe to pop the housing bubble and return to affordable housing:
1. Allow negative gearing for new housing only.
2. Disallow foreign ownership of residential property where that owner does not reside at least part of the year in Australia.

These two initiatives will heavily reduce the number of investors trying to snap up existing housing, leaving it for the people actually looking for a home. Reduced demand will allow house prices to return to an affordable level.

Oh, and to rebut in advance one of the worn-out objections, which is "if we scrap negative gearing on existing housing, there won't be enough properties out there to rent", my answer is simply that when house prices drop sufficiently, renters will be more likely to become buyers.

Roy