Col, the end will indeed be determined by the market, but in a very different way to what you envisage, I fear.

I fear that the market will just keep on dictating the opening up of more land, and the maintenance of high population in order to feed demand…. until it all comes crashing down in a huge heap.

We DESPERATELY need government regulation here. Yes governments have shown themselves to be pretty small-minded on this issue, but the answer is to work towards reforming them and certainly not to give the market a free reign.

Besides, what sort of market forces are we dealing with that can make the price of a basic house and land package prohibitively expensive to the average person….and which can feed exorbitantly high profits into the pockets of those who are already rich and powerful? It’s a gross promotion of inequality!

I think we all agree that property prices are artificially high. Well that in itself is a condemnatory aspect of market force rule, is it not?

The property market is highly artificial under market force domination. So what is wrong with inserting “artificial” government agendas that work towards restoring sanity in this market?

Ludwig "Besides, what sort of market forces are we dealing with that can make the price of a basic house and land package prohibitively expensive to the average person"

The same forces which determine the price of a loaf of bread, a sack of potatoes, a plasma tv screen or a car.

No mystery, no voodoo, simple supply and demand.

The real, deep seated problems have and always will occur only when the "market" is bastardised by governments who, in their inept and incompetent way, endeavour to be all things to all men and muck up the natural equilibrium of market forces. Just ask anyone who used a State government mortgage to buy a house in the 1990's whether they would be better off renting or going to a real lender instead of a "socialist daydream" lender who basically, financially raped them.

Alan;
any idea what proportion (if any) of the increase in land prices because of change in the requirements of what goes with a development block eg connection to sewerage, supply of electricity etc?

Is there any evidence that the price for house building is now increasing because of manadatory requirements for insulation etc etc.?

Col, as far as I can see, you are arguing from a party political viewpoint. That is, anything that Labor governments have regarding land/housing is 'bad', while Federal coalition policies that obviously affect the volume of investment capital in the residential housing market and hence the price, is not manipulating the market in your view. I haven't missed Alan's point, I have argued against the validity of it. I have challenged Alan to produce a graph tracking house prices and tracking tax policies, interest rate levels, immigration levels and land releases against it. Until someone does that, Alan's article is just a set of unsupported assertions.

Today the Sydney Morning Herald had an article about the fall in house prices in Sydney's west and south-west, and the fact that investors in that part of the market are suffering. If the State government were to release more land for housing, guess where a lot of that land would be? Yes, in Sydney's west and south west. Yet, prices have fallen here in the presence of Alan's 'land drought', while prices of houses in the eastern suburbs, inner west and north shore have risen. How would releasing land in Sydney's outer fringes keep property prices in these inner areas low? It's a different market as current price trends clearly prove.

The whole argument is a furphy that has been raised by the Howard government and supporters to deflect blame for housing unaffordability. Don't buy it, Col.

Col, you only quoted the first half of that particular statement of mine. I think the second half makes all the difference to your comments;

“…and which can feed exorbitantly high profits into the pockets of those who are already rich and powerful? It’s a gross promotion of inequality!”

Surely if market forces result in this sort of outcome, they can’t just be left to their own devices.

One of the things that pisses me off the most, after many years of promoting sustainability, is the flagrantly unsustainable nature of the property market, which promotes the open release of residential land when the demand is high, and then promotes the raising of immigration, birthrate and/or regional population growth when the demand is low (or all the time for that matter), thus creating an eternal spiral.

That’s what you get when the market rules the roost – something diametrically opposed to sustainability, or sanity!

Quite frankly, this market has been ‘bastardised’ by greedy and powerful people, with the help of politicians, which at the local level at least are often in the real estate game or closely linked businesses themselves.

Governments have been inept in dealing with this, but in a very different way to what you are saying.

Sorry to butt in, but can someone answer a quick question?

If houses are unaffordable, how come the prices are so high?

If they were truly unaffordable, the price would have to fall, wouldn't it?

Or am I missing some mystery kind of voodoo that enables people to keep selling their houses at unaffordable prices...