Price is the driver of all economies, not supply. To deny this fact is Keynesian claptrap.

The Centre for Independent Studies is privately financed by ....wait for it....the business class. The business class are only interested in growth as this feeds their bottom lime. It is a matter of profound indifference to the business class what social problems high immigration causes to the society they live in. I would say that Steven is a spokesman for Hervey Norman, the Real Estate Institute, and every used car salesmen in every city in Australia.

I find it amusing that Steven Kirchner whines about high taxes on new developments when it is primarily the taxpayers who pay for the new services to homes for tens of thousands of unemployable people. One reason why so many Australians are moving away from inner city areas is to distance themselves from our new arrivals who behaviour leaves a lot to be desired. How many more car washers from third world countries can Australia take? And how many more prisons do we need to build before the penny drops that some ethnicities make much better citizens than others?

I think that the Federal government is terrified of putting the stops on immigration because manufacturing houses is about the only thing left that Australians manufacture. We have become a cargo cult economy where we think that endlessly building houses, town houses, and huge block of flats will somehow cause the Gods of prosperity to smile on us

The over reaching problem is debt. We sold off 4 Govt State banks and the Commonwealth. Now all our new money is created as debt by private banks both here and overseas. When you add inflation of 3% to growth of 3% the debt can never be repaid unless we sell off lots of resources for a song. Remember when we used to afford expressways toll free and education free of debt? There was a Govt institution called the Commonwealth bank that kept our taxes a lot lower.

Govts have to tax us to pay off an ever increasing debt. Our Govts are now controlled by the international banking system. He who pays the piper calls the tune. We have been Globalised and shafted.

Very good comments, LEGO.

An oversupply of housing can not bring the price of housing down, without causing a huge flood of bankruptcies.

I live 22 kilometers from the southern Brisbane suburbs, & probably 32 from industrial areas of high employment. It was always a horse area, with mostly above 5 acre blocks, but recently the council has allowed one & a quarter acre blocks, & a lot of them.

While attractive to people from the areas of 450 Sq. Meter lot sizes, these are a bad size for owners. Too small to support more than a cat, they require a huge effort to maintain nicely, & even more water to have a garden. I guess they do at least have enough space for off street parking.

We see hundreds run out of the city to the peaceful/beautiful country, only to find the workload, & the time commuting just too onerous. In an often quite short time, they want out, but find themselves trapped. They have very little chance of getting back what they have spent, & often, not what they owe on the mortgage.

In a district of 800 houses, many on those larger acreages & not on the market, we have over a quarter, for sale. This does not bring the price down, as few owners can afford to meet the market, they are stuck.

Not that far away we have Yarrabilba, a huge development to total 50,000 population, in the middle of nowhere on those 450 sq. meter blocks. Buyers are paying more for these postage stamp lots than our buyers were paying for their 5000 sq. meter lots around here were just 5 years ago. This proves how bad the shortage of housing land really is.

Already dozens of homes have been jammed in there. I wonder when the for sale signs will start to appear?

I just want to add another dimension that has yet not been raised in relation to Chinese investment. The Chinese have a tradition of what has been termed 'petty capitalism' which is a phrase coined by a book I read whose name escapes me. Basically the Chinese are good at exploiting business opportunities engaging in activities designed to get around legal restrictions and which are not counted in measures of general economic output.

In relation to the domestic residential property market what is happening is some Chinese who move to Australia and obtain either PR or Australian citizenship are utilising this status to operate a little business whereby they assist Chinese nationals in the mainland to transfer their wealth out of the country through the purchase of Australian residential property(s). Often this person may be a relative (often a younger relative) but they may also be a business associate or a trusted friend. The business operates on a commission basis whereby the person with Aust PR or citizenship buys properties on behalf of someone else.

These kinds of arrangements are very informal and therefore hard to prove but I have seen them operate first hand. There is a phrase in Chinese - 'bu yi zhi cai' that translates to ill-gotten gains and means that some people in China have made money through illegitimate means and they then attempt to transfer those gains into tangible assets and it is really very easy these days for them to buy property in Australia. They don't even have to leave China.

What Dr Kirchner and government regulators are displaying is an ignorance of Chinese business practices and how this is impacting on the Australian property prices. One consequence is that Australian citizens (esp first home buyers) are being priced out of the market by foreign nationals.