When it comes to housing crisis, the major political parties do not seem to have any clue of a long term solution. The problem is a demand/supply problem. In a free marker, when demand exceeds supply, no matter how much financial assistance is given to those who cannot afford, there will always be the same proportion of people who miss out. And why would a government try to solve the problem? When housing prices skyrocket, the silly GDP figure will rise, and the government will be able to claim credit for the booming economy.

Rudd's plan to turn parklands into residential areas is a short term one. Packlands near the cities will run out soon, and we need the flora and fauna.

To curb demand, we need to entice people to live farther from the cities. Infrastructures like subway network is called for. We also need to reduce population growth, which is also good for the globe. The welfare system that encourages the poor to have more children needs to be revamped. Baby bonus and Costello's idea of 3 children per family certainly do not help. Intake of migrants to solve labour shortage is also not a good long term policy.

To increase supply, we either need to increase population density in the cities, or build new cities in underdeveloped areas. With good planning, cities with high population density can be efficient, comfortable and environmental friendly. We may just need to adapt to the different lifestyle. To build new cities, I would suggest building one with a special theme like the Silicon Valley or Hollywood. How about Bionic Hill? Australia's biomedical research is world class and most of our Nobel laureates are in that category, but we have been suffering brain drain because of the lack of vision from our polies.

wywong

Demand and supply - absolutely right. However trying to just "build" another town/city in a deserted part of the bush to accommodate extra people won't work without all the services and facilities that go with an acceptable life style. Just try and get doctors to practice in the country at present. Everyone want social services, entertainment, sport, hospitals, water, sewerage, airports, roads, parks, cinemas, night life, clubs, and so the list goes on. You couldn't build this in 100 years. Population control and more money on education to train the potential that we have already here is the only slow and reasonable answer. The alternative is what we now have, overcrowding, dissatisfaction, high prices, inflation, pollution, shortages of water and power, health problems...........again the list goes on.

I don’t think we should even be considering large-scale decentralisation or the opening up of huge new areas for housing. Urban consolidation yes, with minimal expansion. But the overridingly important thing is to stop population growth dead in its tracks. Let’s wind immigration down to net zero and get rid of that disgusting baby bonus.

It is just absolutely nonsensical to even talk about addressing the housing crisis if we are going to simply accept rapid population growth and only address the supply side of the equation.

And it is just as non sensical to talk about sustainability or meaningful reductions in greenhouse gas emissions or properly addressing all manner of other environmental issues while the number of consumers and polluters continues to rapidly increase.

This is extraordinarily basic…..and yet very few people seem concerned about the push or facilitation, from both the Coalition and Labor, of rapid human expansionism with absolutely no end in sight and not even a thought of there being an end to it.

Why?? ??

What on earth gives?? ??

What is with our incredibly warped collective psyche?? ??

I have to disagree with snake in the time taken to develop a city. Countries like Japan and China were destitute just half a century ago, and now they have megacities with all brand new infrastructure, and population that are comparable to the whole of Australia. Las Vegas, Silicon Valley and our own Canberra were born less than a century ago.

With money (which our government have), it does not take long to build universities and research centres with good facilities. There won't be a lack of students from interstate and overseas who want to study medicine there. With sufficient incentives, quality lecturers and pharmaceutical companies will come, which will be followed by settlers, developers and other businesses.

I agree with snake and Ludwig in that population control is the preferred solution, but I am afraid it is the least likely action taken by any democratic governments in the near future. The ultimate reason is that we human are all selfish. We want to have the prvilege of more kids and the leaders want their countries stronger economically and politically. If we are altrusive, communism will be successful and one-child or two-kids policy will be in place all over the world.

Ironically, the housing affordability crisis seems to be most effective thing that stems our population growth - it encourages emigrants, discourages immigrants, and makes many people put off having kids. Polution may be the next most effective measure - by reducing our fertility!

There is no housing crisis. House prices only go up if people are willing to pay that much for them. It's like you are complaining that we are too rich. There are plenty of cheap houses around. People are just way too picky about where they live. Which is fine, we are all rich. But don't expect the government to buy you a house - that just pushes prices up further.

High prices are a good thing. It means people will not consume so many resources for their home.

Wywong, I don’t think that you should assume that population control “is the least likely action taken by any democratic governments in the near future”.

It really is very easy to implement. All we need is a gearing down of immigration to net zero, over a period of perhaps five years, and the abolition of Costelloism – the paying of large sums to (the bribing of) women to have kids.

Beyond that, we should be right. The natural fertility rate in Australia is a bit below replacement level, so even though the age skew means that the population will still increase with an overall below-replacement fertility rate, it will be a low rate of increase that will level out in two or thee decades.

I think that our society is going to see the imperative of getting Australia off of the continuous growth spiral and onto a real sustainable foundation really soon. And a fundamental part of that is bound to be a demand that population be stabilised, if not reduced by way of reducing immigration to absolute zero and encouraging emigration.

Politicians are going to get blasted with this, just as they have been with concern over climate change. They’ll change their attitude towards rapid unending expansionism. The question is; will it happen before it is essentially too late?

So those who are concerned about housing affordability, and all sorts of other issues, should be pushing hard for population stabilisation, and certainly not just thinking of our current high level of population growth as politically unchallengeable.

Freediver said: "There is no housing crisis."

Demand is exceeding supply, largely due to high immigration.

http://www.abc.net.au/news/stories/2007/07/23/1985105.htm

The OECD has found that Australia has the most over-valued housing sector in the world. This clearly constitutes a 'crisis' in my books.

"House prices only go up if people are willing to pay that much for them."

Housing is a necessity, not a mere consumer item. Faced with no real alternative, Australians are simply going to dig themselves into more debt in order to put a roof over their heads - all borrowed on the nation's current account. This borrowing amounts to spending future income now, since the foreign debt will need to be repaid out of future income. As the housing market has no capacity to service this debt, the only outcome can be the eventual fall in relative living standards.

Maybe you believe this model is sustainable. I certainly don't.

Will they never learn !
It is very simple;

When the government enforced the demands of women rights advocates
that the financial institutions had to lend on two incomes that
immediately dumped twice as much money into the market.

As Wywong pointed out the market responds with higher prices.

It is as simple as that ! Borrow on two incomes and you need two incomes
to make the repayments. It is there that the problem exists.
They want to be able after a period to switch back to paying with one
income. I have news for you; It doesn't work like that !

Ludwig, I agree with most of what you say, such as we should push the politicians for population control. One minor problem is that even when the population is stabilized, the demand for new housing will still go on for decades because a fixed population divided by a reducing family size equals to an increasing number of dwellings needed. The major problem, however, is that our population is aging, which means a diminishing workforce and an increasing demand for welfare such as health care. Solution to that problem is not easy and may justify a new thread.

Sure wywong, population stabilisation is not the total answer. But it is a necessary prerequisite to getting us off the growth spiral, and being able to affectively address the housing crisis.

There will always be a demand for housing, and it will remain pretty high after population stabilisation. But at least then urban consolidation and a minor amount of new suburbia will be able to cater for it.

I think the negative connotations of an aging population are grossly overstated. There are plenty of ways of dealing with the projected increasing proportion of retirees without having to resort to increasing immigration and birthrate, and then maintaining high population growth indefinitely. In fact, boosting population growth is about the stupidest pseudosolution imaginable.

This has all been discussed on this forum. But I’m going to get out of the house and enjoy this lovely Saturday, and not try to chase it up right now!! (:>)

There is the possibility of allowing landholders greater freedom to subdivide and build. This would release many more new blocks of land and quickly bring the housing price spiral to a halt. I suspect that such options are not considered as they might jeopardise the profits of a few making a fortune from the crisis.

It is good to see that the Bring Back Feudalism society is still in good humour. Freediver ( shouldn’t you call yourself “slave driver”?) makes the excellent point that high house prices are a good thing, and for anyone yearning for the good old days of feudalism indeed they are. Take the example of Mr and Mrs Peasant trying to buy a house in high and low immigration scenarios. They both work full time, save $40k annually, and have saved $100k for a deposit. In the nauseating egalitarian/low immigration scenario(a), the house costs $200k and interest rates are 5%. In the wonderful feudalistic/mass immigration scenario(b), the house costs $500k and interest rates are 8%. When the loan is paid off the savings are invested for a 10% return in both scenarios. The result shows why any feudalist should strongly support high housing costs and open borders. And “Workchoices” will make things even better.

(a)A house and $1740k after 20 years.

(b)A house and $29k after 20 years.

Now how could any aspiring feudalist not think (b) the better way to go?