02 May 2010
What the report says …
For purchasers, affordability is constrained by prices that are high relative to average income levels. While high prices can result from increases in housing demand, they can only be sustained when supply is not responsive. Evidence suggests that the current supply of housing is at insufficient levels, placing ongoing pressure on house prices.
Higher house prices are likely to result from restrictions on the supply of housing that result from zoning, lengthy approvals processes and building code and other standards imposed on building quality. Housing affordability needs to be considered against the other policy objectives that motivate these regulations.
Evidence suggests that the current supply of housing is insufficient, placing ongoing pressure on house prices. This suggests a serious community dialogue is needed on the distribution and quality of housing across Australia.
What the Urban Taskforce says …
The Henry Report makes it clear that the current supply of housing is insufficient, placing upward pressure on home prices. We welcome the report’s call for a serious community dialogue on these issues. The dialogue can’t wait any longer and all levels of government must now focus on this issue.