What is really puzzling is the logic that housing is somehow "unaffordable" in the first place. If it were, no-one would buy, because no-one can afford.

So we are not looking at affordability per se, we are looking at... what? first home buyers? low-income earners? When we do that we get into all sorts of arguments about the fact that people are prepared to moan about housing costs, but not about delaying the new Commodore, the plasma TV, cutting down on internet expense, mobile phones, bacardi breezers, PC games, Wii consoles or Playstations.

It is also interesting that in NSW the median house price has been virtually steady for many years, around the $500k mark. Statistically, that means that there are as many properties lower than that figure than higher. If the average price is increasing, then it would appear that it is the rich end of town that is having to fork out more, not the poor.

Never mind, it is a great hook to hang the "stop immigration" hat on, which is always good harmless fun.

Bazz

If only it were that simple, your misogynistic idea might have some validity. The cost of construction has fallen and the cost of land has risen while all those women have got themselves paid employment. So how does your idea explain the fall in one component and the rise in the other?

Pericles

Nice to see you coming to play again. Yes, cutting immigration would make housing more affordable, but only because the immigrants are the unwitting pawns in the corruption of the housing market. I suppose you would see such an act as either extreme selfishness or economic stupidity, dependent on whether immigrants represent a burden or a benefit.

The ANU's Wayne Errington on record high immigration levels and the housing affordability crisis:

"Housing affordability packages have been promised by both sides of politics for some time. All sorts of ideas have been canvassed: increasing the first home-owners grant, mortgage tax deductions, stamp duty holidays, more land releases. To the extent that most of these plans tend to increase demand for homes, they won't solve the problem.

The pressure on housing prices caused by our record-breaking immigration program, though, has barely been mentioned. Economic forecasters BIS Shrapnel expect demand for new houses to outstrip supply again this year, in part due to the high level of immigration. Many of the entrants to Australia are on temporary visas, adding to the 'rental stress' that threatens to make the rental market a federal election issue for the first time in memory.

In the lead-up to the 1996 election, then New South Wales Premier Bob Carr argued that Sydney was full and that the country needed to re-think its immigration program. Since then, after cutting the overall intake in its first term to around 80,000, the Howard Government has quietly ramped up the numbers of immigrants to twenty-year highs.

....

Let's see how carefully the major parties tip-toe around the issue of immigration when they debate housing policy in coming weeks. Labor's position on immigration is part of its wider strategy to differentiate itself from the government on only a few select policies. The problem with a bipartisan approach to immigration is that it leaves room for ratbags and racists to enter the field. Forty years after we began to dismantle the White Australia Policy, our inability to debate immigration in a sensible way doesn't say much for our democratic institutions."

http://www.abc.net.au/unleashed/stories/s2054424.htm

Dresdener

The housing affordability crisis would end rapidly with a bit of free market philosophy. Were landowners given a bit more freedom over what they did with their land, the supply of new housing would greatly increase and prices would fall in a short time. But governments dont want this to happen because it would spoil a very profitable rort for them and their mates. Shann Turnbull seems oblivious to this, whereas for me, watching a polly muse about housing affordability is a bit like watching the big bad wolf muse about the welfare of little pigs.

Housing affordability is just another yin yang battle of feudalism and egalitarianism.

Hi Fester

So I can understand your solution for making housing affordable could you please explain how you define a “free market” in the context of land ownership?

Also, in what ways is your thinking different from our leading economists who accept that the rules for owning land are fixed and not a public policy variable as discussed in my paper at http://ssrn.com/abstract=1027864?

Hi Shann

By "free market" I mean more freedom for landholders to develop their land. I see the current regulation as unsatisfactory. For example, you might have seen the sad tale of Dr Seneviratne's dealings with the Brisbane City Council in the latest Sunday Mail(18/11/2007). The extraordinary thing was that the Council's behaviour was upheld in court. Unfortunately the SM didn't deem the story worthy of bandwidth, though it did run an online story on Paris Hilton's latest video.

Also, could you check the link you provided. I cannot open it. And one question: What makes you think that governments want to make housing more affordable? Hasn't the status quo been a creation of governments?