Treasury tells all: How the housing market is so stuffed up

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Our housing industry has been too slow to respond to the increased demand for housing. What’s the Albanese government doing about this mess?

Would you believe that our ever-rising house prices are a sign there’s something badly wrong with our housing market? Would you believe our housing arrangements are worse than in the other rich countries?it tacks onto the budget papers. This year it’s about meeting our housing “challenge”.In a well-functioning economy, its industries can respond to the increase in demand for their good or service by increasing their supply without much delay.

Our completions of new private dwellings reached a peak of more than 200,000 a year in 2018-19 but have since fallen to about 160,000 a year. This has left us with an acute shortage of properties available to buy or rent. Calculations by a federal government agency says that, over the next six years, the nation’s existing unmet demand will never be satisfied unless completion times are speeded up. In six years’ time, we’ll still have a backlog of about 39,000 dwellings.

Delays in approving development applications by local councils can be excessive. I think councils and government departments are monopolists and, like all monopolists, they take advantage of the lack of competition.

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