2013 Demographia Housing Affordability Survey

By Leith van Onselen

The 9th Annual Demographia International Housing Affordability Survey has just been released and, once again, it ranks Australia as having one of the most expensive housing markets out of the countries surveyed.

This year’s report assesses 337 markets in seven countries: Australia, Canada, Hong Kong, Ireland, New Zealand, the United Kingdom, and the United States. The survey employs the “Median Multiple” (median house price divided by gross annual median household income) to rate housing affordability. This measure is widely used for evaluating urban markets, and has been recommended by, amongst others, the World Bank and the United Nations, and is used by the Harvard University Joint Center on Housing.

The Survey ranks urban housing markets into four categories based on their Median Multiple, from “Affordable” (3.0 or less) to “Severely Unaffordable” (5.1 & Over) [Table ES-1].

According to the Survey, Median Multiples were historically 3.0 or less in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States – a notion supported by the below chart from the Reserve Bank of Australia (RBA):

Whilst this affordability relationship is broadly present in many housing markets of the United States, Canada, and Ireland, the Median Multiple has escalated sharply in the past decade in the other housing markets covered in the Survey (Table 5).

Of the 337 housing markets surveyed by Demographia, a significant proportion of the unaffordable markets are located in Australia, with 30 ranked as “Severely Unaffordable” and nine “Seriously Unaffordable”. Australia currently has no housing markets ranked as “Affordable” or “Moderately Unaffordable”. Last year’s Survey contained only 25 markets in the “Severely Unaffordable” category. The increase this year is due to an expansion of the Survey’s coverage into a number of mining localities in Western Australia and Queensland, as well as some popular coastal locations (see next chart).


Hong Kong (China) and Vancouver (Canada) have the Survey’s most expensive housing markets, with Median Multiples of 13.5 and 9.5 respectively. Honolulu, USA (9.3), Bournemouth, UK (8.7), and Port Macquarie, Aust (8.6) round out the top five.

Overall, Australia has moved down the league tables, registering 8 out of the 20 most expensive housing markets identified in the Survey, but only four markets in the top ten (versus five in last year’s survey):

The overall decline of housing affordability in Australia (and the modest recent improvements) is clearly evident in the below Demographia chart, which shows the change in Median Multiples in Australia’s major urban markets:

Whereas all major Australian markets, except Sydney, had Median Multiples of three in the early 1980s, today all are ranked at around five or above.

One of the key contentions of the Demographia Survey is that higher land prices are the principal contributor to the rapidly increasing home prices in unaffordable markets. These land prices include the cost increasing influence of land supply restrictions (such as urban growth boundaries), excessive infrastructure fees and other overly strict land use regulations:

Overwhelming economic evidence indicates that urban containment policies, especially urban growth boundaries raise the price of housing relative to income. This inevitably leads to a reduced standard of living and increases poverty rates, because the unnecessarily higher costs of housing leave households with less discretionary income to spend on other goods and services. The higher costs ripple into rental markets, tightening the budgets of lower income households, who already suffer from lower discretionary incomes.

The principal problem is the failure to maintain a “competitive land supply.” Brookings Institution economist Anthony Downs describes the process, noting that more urban growth boundaries can convey monopolistic pricing power on sellers of land if sufficient supply is not available, which, all things being equal, is likely to raise the price of land and housing that is built on it.

Urban containment policy has been associated with greater price volatility and greater speculation. Investors and speculators are drawn to metropolitan areas where “quick” money is to be made, because of the inflexibility of the supply market.

And in the 2011 Survey, Demographia noted the following about Australia:

In Australia, 95 percent of the increase in inflation adjusted new house (and land) costs were attributable to land, rather than construction from 1993 to 2006. In more restrictively regulated San Diego, house prices were 250 percent higher than in Dallas-Fort Worth in 2007, yet cost only 15 percent more to build…

Demographia’s contention that Australia’s rising home prices have been caused primarily by escalating land costs is supported by evidence. The below chart shows aggregate Australian housing values relative to GDP broken down by the land component and the structure component. As you can see, almost all of the growth in Australian housing values (relative to GDP) has been in rising land values:

Further, this escalation of land costs has occurred across Australia’s housing markets, as evidenced by all capital city markets experiencing strong growth in vacant land values in the decade to 2012, according to RP Data:

A key reason for this land price escalation in Australia (as well as in New Zealand, the United Kingdom, and the expensive markets of the United States and Canada) is that the market’s ability to quickly provide low priced new housing supply is being hampered by restrictive land use regulations, many of which have come into effect since the mid-1990s (Sydney has had long-standing limits on housing development on the urban fringe). Demographia describes the key features and consequences of restrictive housing markets as follows:

Urban containment (More Restrictive Land Use Regulation) relies on intrusive land use regulation, and includes markets where residential development (new construction) is strongly controlled by comprehensive plans or development limits. Generally, it is an urban planning objective to make urban containment the only legal regulatory structure. There is a strong campaign to make the principal alternative, liberal regulation (below), illegal.

Urban containment may also be characterized by terms such as “densification policy,” “compact development”, “urban consolidation”, “growth management” “and ” smart growth.” Generally, urban containment regulation is “plan-driven,” as planning departments and governments determine where new housing is allowed to be built. There is a “negative presumption,” with new development generally prohibited, except in limited areas where it is permitted by government plans.

By severely limiting or even prohibiting development on the urban fringe, urban containment eliminates the “supply vent” of urban fringe development, by not allowing the supply of housing to keep up with demand, except at prices elevated well above historic norms. In addition to higher costly housing costs relative to incomes, the higher densities in urban containment markets are associated with greater traffic congestion and longer average work trip journey times.

Urban containment policies are normally accompanied by costly development impact fee regimes that disproportionately charge the cost of the necessary infrastructure for growth on new house buyers. There is particular concern about the cost increasing impacts of these fees, especially in Australia, Canada (Canadian Mortgage and Housing Corporation), New Zealand (New Zealand Productivity Commission) and California.

By contrast, affordable housing markets, like Texas and Georgia in the United States, utilise open market-based land use structures whereby plentiful new housing supply is able to be built quickly and cheaply on the urban fringe, thereby preventing rapid house price escalation. Demographia describes these markets as follows:

Liberal Land Use Policy (Less Restrictive Markets) applies in markets not classified as “urban containment.” In these markets, residential development is allowed to occur based upon consumer preferences, subject to reasonable environmental regulation. Generally, liberal land use regulation is “demand-driven” There is a presumption allowing land to be developed, except in limited areas, such as parks and environmentally sensitive areas. By allowing development on the urban fringe, liberal land use regulation allows the “supply vent” to operate, which keeps house prices affordable. Less restrictive regulation can also be called traditional or liberal regulation. In addition to lower costly housing costs relative to incomes, lower population densities in liberal markets are associated with less intense traffic congestion and shorter average work trip journey times.

So under an open market-based model (provided there are not also substantial physical barriers to housing supply), increased demand, such as from reduced lending standards and easier availability of credit, quickly leads to the building of additional low priced housing on the urban fringe, which helps keep house prices in check and reduces the likelihood of speculative housing bubbles developing. Further, highly leveraged speculators are less likely to be encouraged into open land markets, since there is little prospect of achieving strong capital gains. Investing in open land markets is, instead, more about rental yield.

That said, restrictive urban planning structures should not be viewed as a one-way bet for house prices. Demogrphia also notes that unresponsive land supply is more likely to result in higher levels of house price volatility and boom/bust price cycles. Why? Because strict land-use policies (planning) steepens the supply curve, which makes house prices more sensitive to changes in demand, increasing the likelihood of the housing market experiencing boom/bust price cycles as demand rises/falls. To highlight this point, Demographia provides a neat comparison between the liberal markets of Texas and Georgia, and the highly prescriptive and unresponsive markets of California and New York:

In Atlanta, Dallas – Fort Worth and Houston, with liberal land use regulation, there has been significant migration of people from other parts of the United States. Among the three markets, there was net domestic migration averaging 7.6% of their 2000 populations between 2000 and 2011.15. Despite this strong underlying demand, each of these markets remained affordable for virtually the entire period from 2000 through 2012.

In Los Angeles, New York and San Francisco, with urban containment regulation, there was significant net outmigration to other parts of the United States. The average net domestic outmigration from 2000 to 2011 was 10.3% compared to their 2000 populations. The net domestic outmigration figures were especially notable in New York and Los Angeles, which lost 2.1 million and 1.4 million residents respectively to other parts of the nation.

Despite significantly higher population growth in Texas and Georgia, house prices remained both more affordable and stable throughout the US bubble/bust era than in the restrictive markets of California and New York.

Full report below.

9th Annual Demographia International Housing Affordability Survey (2013) by leithvanonselen

Unconventional Economist
Latest posts by Unconventional Economist (see all)


  1. Further, this escalation of land costs has occurred across Australia’s housing markets, as evidenced by all capital city markets experiencing strong growth in vacant land values in the decade to 2012, according to RP Data

    Similar escalation in land costs has occurred in places where there are no inherent land availability issues, such as Alice Springs (and virtually all regional towns).

    This can only be ascribed to market bubble mentality and easy credit availability.

    • Land supply is regulated in Alice Springs. Just cause there’s lots of land doesn’t mean it is allowed to be built on. Same goes for Canberra, Darwin, and just about every other regional town in Australia.

      • Still doesn’t explain towns with unbought, expensive, empty subdivisions sitting on the boundaries, but highly inflated existing dwelling prices.

        • Yes it does. Slow (unresponsive) development times lead to supply being added too late in the cycle, i.e. after the market has peaked. Melbourne, Ireland, Las Vegas, Arizona, Florida, and inland California are prime examples.

          • Well, a comment today from an article in WAToday on FIFO workers seems to support what you are saying:

            “I lived in Port Hedland 30 years ago for most of the year it was bloody hot but it was a great time. The problem, is greedy town councils wont release land for housing, look at Port and South Hedland for instance there is no shortage of land but they wont allow it to be developed so they can keep the values and rents up on the properties they own. This alas is the case all across the country and we all pay the cost. When all the property is in hands of a few robber barons Australia will go the same way Argentina went.”

        • One of the arguments constantly made in the UK, is that their cities have large numbers of empty, unrenewed, blighted buildings; “therefore there is no justification for relaxing greenfields supply restrictions”.

          So why, then, do the prices never fall to the point where a few more of the third of the population who never own their own home, can do so; or so the average age of a first home buyer there can drop from 38 or so?

          Real Estate prices are “downwards sticky”, property owners “hold out” for what THEY see to be “historically normal” values, and in many cases they themselves are “greater suckers” who have paid too much in the first place for the properties.

          In the case of fringe developments you refer to, the developers have had to pay so much for the raw land in the first place, that they cannot reduce prices or they will be selling at a loss.

          When you have a racketeered supply of land, the people involved in supply of housing have to engage in gladiatorial bidding contests with each other for the land, before they even start to build anything – otherwise they go out of business. But at some point, the winners of this bidding war end up unable to sell at prices the public can pay. The same happened in NZ in the 1980’s, with import license quota for cars. The guys who won the tendering auction for all the quota after the third or so year of this process, ended up going bust, because the public could not afford the prices the importers had to sell the cars for to recoup the cost of the quota…..!

          • “But at some point, the winners of this bidding war…”

            What is most important to recognise is that the real winners of this “bidding war” scenario are the bankers who have been granted exclusive powers to create the “credit”-at-usury which folks are using to outbid each other.

            Everything else is noise compared with that core issue.

          • PB – your view seems to say that ‘ debt fuelled rent-seeking is a fact of life, so the best way to mitigate it is to open up the land use limitations’. Why can’t this just get turned on its head and say ‘land use limitations are a fact of life’ so lets belt the debt fuelled rent-seekers?

            Do you have any examples where attempts to bash the rent seekers were even tried? (Genuine question btw not being sharp – I expect that you’ve looked at it)

            I get the feeling that railing against rent-seekers (by either method) is a waste of time – history seems to show they are very good at winning this game?

          • aj, see my long comment further down about compulsory acquisition of land. I do believe that there would be ways other than totally liberal fringe land supply, to keep the capital gains down.

            I do not believe any TAX would do it on its own, but there would be ways to not have growth constraint regulations, but achieve reduced “sprawl” by taxes (eg on petrol) and fiscal incentives (road pricing, land taxes, etc) . The elder land economists such as Edwin Mills have always argued this.

            As I say below, it is a give-away that the growth-containment advocates are economically illiterate, that none of THEM have bothered to consider the capital gains – price inflation problem. It is typical that the people who devised the UK Town and Country planning system back in the 1940’s DID think of this and wanted compulsory acquisition of land as an inherent part of the system.

            We tend to have lost a lot of knowledge that was common knowledge back then. It was common knowledge in the 1920’s, that increasing the supply of land with cost-effective transport infrastructure relative to the amount of land brought into supply, would democratise home ownership, for example. Social reformers were all in favour, not just specialist economists.

          • I recommend the book “Cities of Tomorrow: an Intellectual History of Urban Planning” by Peter Hall, for the points I am making above.

      • rob barrattMEMBER

        What you need to be able to do is find examples where you can differentiate (or allocate a weighting) between the effects of easy credit availability (Alice in bubble land?) and the result of limited land availability.

        • There are several studies on the USA. Of course the entire nation had easy credit. But approximately 60 cities had price bubbles and approximately 290 did not.

          The only way to devise a formula that explains this, is to make the “speculative” proportion of demand ENDOGENOUS to supply inelasticity.

          For example: “The Role of Speculation in Real Estate Cycles”, Stephen Malpezzi and Susan Wachter (2002)


          “Housing Supply and Housing Bubbles”, Glaeser, E.L., J. Gyourko and A. Saiz (2008)


          • Sorry, approximately 60 cities had price bubbles and approximately 190 did not. That is, cities with populations of over 250,000.

        • Your post seems to suggest that Alice Springs is in a credit bubble. This is a logical assumption unless you are familiar with the Territory.

          The city of Alice Springs is built in the middle of Aboriginal land. The city is constrained by these boundary’s.

          Alice’s issue is a case of limited land availability, not easy credit.

          • In other words, like many other places in Oz, there is an artificial (man-made) throttling of land supply. Is that your point?

          • In that case, how bad would it be if the land supply is artificially constrained, as Leith insists, and credit is also easy? And people get into a tulip bubble frame of mind?

            Triple whammy? 😯

            Heavy stuff. Now for some comic relief:

            “I’ve slept with over 2,000 women. After a while they all become a bit of a blur. One woman looks the same as another…” Basketballer Dennis Rodman, 2012

          • Revert2Mean, my comment is in response to Rob Barretts.

            And Dennis Rodman’s quote quote is probably factual for him, not comic.

  2. Seriously how in income calculated in this survey. Any survey that ranks the Gold Coast as one of the twenty most unaffordable markets in the world has some explaining to do – I have seen units change hands for as little as $30K and I was offered a 2 bed unit for $93K recently.
    If I look at the incomes on the Gold Coast they are low because of the high number of retirees who are often very wealthy but have little or no income. They also have no debt and have modest spending habits.

    Exactly how does Demographia calculate income?

    • Demographia uses the Median Multiple (median house price divided by median household income), as recommended by the United Nations and the World Bank.

        • Given Australia’s high stamp duties and relatively high interest rates (partly offset by our lack of property taxes), I reckon we would rank even more poorly internationally if factors other than prices/incomes were taken into account.

          • It might be a good idea to do some analysis on that, and over a wide range of countries, not just the handful chosen by Demographia.

            Because I’ve seen many broader surveys that place Australia at an average ‘affordability’ level in the global stakes – not overly high or low, somewhere around the middle internationally.

            How about it?

          • I agree on the high stamp duties, but if we are going forward into an extended period of low interest rates then the second point may not apply.

          • Of course not. But I’d rather a simple metric than some of the convoluted affordability ratios that have made their way around the market. You know the ones – the sort that argue that Oz housing is the most affordable in well over a decade.

          • I regard Demographia as being agenda driven.

            I don’t have a problem with saying that prices are elevated on a long term comparison, and highly elevated in some cases, but comparisons to times before the mass entry of married women with children into the work place just don’t work for me.

            The social changes do count when people buy homes. Tax rates have changed, middle class welfare is now in place, and those factors were not in play before.

            It’s amateurish at best.

          • Peter. How does working more hours for something (e.g. via dual income families) make it more affordable? Also, you have left out child care costs, which is something single income families of the past didn’t have to worry about.

          • Leith – depending on the scenario the working families of today get a very large slice of those child care costs covered, and they get far more generous Family Tax A and Family Tax B than working families from pre 1980 received in their Child Endowment payments.

            Mothers in the eighties and nineties worked as well, the previous generations who were mothers in the fifties and the sixties less so.

            Individual tax rates have reduced ocnsiderably, and two incomes has split taxation – http://www.ato.gov.au/individuals/content.aspx?doc=/content/73969.htm

            This change has taken decades, it didn’t happen overnight.

          • Peter Fraser; a market either has house values “anchored” in truly competitive urban fringe development with minimal “planning gain” or it does not. It does not matter how much middle class welfare is introduced in an affordable US city: the prices remain anchored by how competitively fringe developers can turn farmland into housing. If you give them middle class welfare, or housing subsidies, or lower interest rates, they are not dragged several steps backwards by the assistance capitalising straight into house prices.

            One of the reasons Southern and heartland USA is humming, is that “stimulatory” low interest rates really is feeding straight into increased discretionary spending after housing costs, and increased business formation and so on – but in California, the busted-arse State that the Federal Reserve is desperately trying to resucitate, house prices and commercial land prices are on their way back up after never having fallen anywhere near far enough, and without any REAL recovery in the REAL economic indicators….!!!!

          • dumb_non_economist

            Peter F,

            Do you wonder why some here call you a spruiker?

            What’s your expertise to call Demographia survey as amateurish at best. The World Bank and the UN may not know, but I’d place Harvard some ways in front of you in determining its fitness for use.

            By the way, I think it’s you that is agenda determined!

          • I should have also said that the middle class welfare capitalising into house prices, kicks every yet-to-be-first-home-buyer straight in the teeth – UNLESS you have the prices of new housing developments anchored in truly competitive supply of land beyond the urban fringe.

          • DNE – do you think that waving your arms loudly and insulting people actually proves anything.

            Phil Best – look at my comments above – I’m happy to accept that prices are elevated, but how do Port Macquarie, the Sunshine Coast and the Gold Coast make it into any global list of unaffordable dwellings with London, Honolulu, Hong Kong and San Francisco – it’s obviously laughable. I don’t care if you see it as reverse spin, it’s spin nevertheless.

          • It is pretty simple Peter,

            People in London get paid more than us, they also pay about the same for housing. My friends there can’t believe the prices over here.

          • In London, you either have to be working in international finance, or a wealthy celebrity or a government department honcho, to afford to live decently: OR you have to be living eight to a room. Overcrowding among low income people, of a kind that used to be regarded as a social crisis, is a “dirty secret” in cities like London and Vancouver. Most of these people are recent immigrants, BTW – native Poms remain unemployed in Liverpool rather than go to London to get low paid work, because they will not tolerate the requisite living conditions that Pakis will.

            Of course it has taken 6 decades for these conditions to mature; give Sydney a bit more time…..

          • dumb_non_economist

            Peter F,

            I was wasn’t trying to prove anything, in fact it was you waving your arms claiming the demo work as amateurish at best with nothing to back it up, a tad hypocritical!

          • Leith – depending on the scenario the working families of today get a very large slice of those child care costs covered, and they get far more generous Family Tax A and Family Tax B than working families from pre 1980 received in their Child Endowment payments.

            I doubt many families with both parents working do better than break even in the short to medium term, compared with those that have one parent stay home.

            Mothers in the eighties and nineties worked as well, the previous generations who were mothers in the fifties and the sixties less so.

            Yes, but back then extended families nearby to handle childcare duties were commonplace.

        • “Of course not”

          Has MacroBusiness ever posted a critique of Demographia?

          “I’d rather a simple metric than some of the convoluted affordability ratios that have made their way around the market. You know the ones – the sort that argue that Oz housing is the most affordable in over a decade.”

          Your own chart above, from Demographia, seems to put most Australian city median multiples at roughly the same level they were in 2004-2005, nearly a decade ago?

          • I meant to say well over a decade. Some of the affordability ratios floating about say that they are at 1990s levels, which is just ridiculous.

            If you want to critique Demographia, be my guest. I have better things to do with my time.

          • OK thanks, I haven’t seen those surveys showing affordability still being at 90s levels. Would you mind posting a link to them, would sure love to see what drugs those spruikers are on!

          • “If you want to critique Demographia, be my guest. I have better things to do with my time”

            I’m sure you do, it’s just that I’ve seen MacroBusiness critique affordability reports/surveys from the RBA, RPData, and others, but Demographia always seems to be published here without critique.

            Also, the RBA chart posted in your blog is out of date (ends in 2007). Here’s a more recent version.


            It looks like Australia’s median multiple was never steady at 3x. It briefly passed through 3x on it’s way from 2x to 4x, and has stayed close to 4x since 2002. This is an updated version of the RBA chart you posted in your blog, so I assume you do approve of the source?

          • Here’s another chart from the RBA, showing the rate of growth in housing “credit” (click on “Credit Growth by Sector“).

            The housing Ponzi requires not only growing “credit” but accelerating “credit”, in order for there to be enough new “money” for the bidding wars to keep prices going up.

            Newsflash: It isn’t accelerating. Our “credit”-at-usury-driven housing Ponzi peaked in Feb 2004.

          • “It looks like Australia’s median multiple was never steady at 3x. It briefly passed through 3x on it’s way from 2x to 4x, and has stayed close to 4x since 2002. This is an updated version of the RBA chart you posted in your blog, so I assume you do approve of the source?”

            The chart you link to uses average prices and average incomes, not median.

    • Income is a poor measure in areas with net migration from major cities. The prices are driven in retiree markets by how much the retiree gets for selling their home in the city from which they are coming. It isn’t about their income, it’s about their existing home value. You sell your (possibly tired) but probably well located older house in Sydney, pocket a couple hundred thousand and get a new home with new appliances and no maintenance needed for 10 years. You buy either in a retirement town like Port Macquarie or the Central Coast or in a new unit development in a nearby area. Big generalisations, but the main point is that in retirement drivne housing markets it is the value of the current home that is the main factor, not income.

      • But a market either has values “anchored” in truly competitive urban fringe development with minimal “planning gain” or it does not.

        It does not matter how many people move to an affordable US city, or who they are: the prices remain anchored by how competitively fringe developers can turn farmland into housing. Houston grew from 4 million people to 5 million from 2000 to 2010 without house prices going up. Atlanta grew from 3.2 million to 4.2 million and house prices FELL because “supply” overshot…..!

  3. According to that survey none of the countries has affordable housing (ratio of 3 or less).

    Perhaps a more holistic survey is needed, because on the face of it this Survey puts Australia on a par with UK and NZ, and a lot more affordable than HK, so the spruikers will use it to claim Australia isn’t too bad.

    How about non-English speaking countries, I would assume most of them have affordable ratios (i.e. under 3x)?

    • Late last week I have been asked to write a piece for an investment magazine in the non-english speaking part of the world about how people can sell their apartments and buy a house and land here.

      I call them up and have a chat with them and refer to realestate.com and domain.com to tell them there aint nobody who is selling apartments in major european cities and buying houses with big backyards.

      They are going over these sites as I spoke to them. I could hear the sound of jaws hitting the floor.

      Southern UK has unaffordability issues like Australia, but the North doesnt (assuming you would want to live there), NZ is expensive in terms of what people earn there, but is obviously far cheaper than here.

      You want some affordability, have a look at Spain, Portugal, Italy, Cyprus, Bulgaria (all of whom have disaster area economies) and Turkey, indeed have a look at prices in major German cities.

      • “You want some affordability, have a look at Spain, Portugal, Italy, Cyprus, Bulgaria (all of whom have disaster area economies) and Turkey, indeed have a look at prices in major German cities.”

        So to find an affordable house on this planet we basically need to move to an economic basket case with sky high unemployment. A sad state of the world.

        • I think that you will find those countries experienced a credit crunch as well – so even if housing is affordable, you still can’t buy it.

          • I guess if Australia has similar price drop like Spain / US, maybe I can buy with CASH. I know many in my circle also can do same thing.

          • Deo – you have earnt your cash in a strong economy and naturally you will buy better in a weak economy – the Brits and Americans did exactly that in the 20th century – but to go and live there you sacrifice your income in this economy – it might work for Scott Fitzgerald, Peggy Guggenheim and wealthy retirees but it’s not something that most can do.

          • PF, I thought we only talked about median-multiple of incomes, so whether someone lives in strong or sub-prime economy should not be overly relevant. In lower income place, then you have 3x or 5x those lower incomes while in higher income place, if we want to make comparison then the same multiple should apply. I just want to see Australia to have similarly more affordable income multiples with Spain / USA and don’t really care about income level itself.

          • Anyway, the fact that I have enough CASH to buy if price drops like in the US is not necessarily a function of my level of income. It is more reflection of my ability to save my incomes, instead of spending it. You can have lower or higher incomes but if you cannot save, the you won’t have anything to show, right ?

          • Yeah, the bubble in Spain was so big, so even with big price drop, technically their price is still badly unaffordable. But I also mentioned USA, they look OK compared to Australia multiple medians.

        • Martin Place: you miss the point that Germany is the strongest economy in Europe and Texas is the strongest economy in the USA. Both have affordable housing, and this is a REASON FOR the economic strength of both.

          If the USA did not have dozens of Southern and heartland States that had no problem with housing affordability or price bubble and crash syndrome at any time, it would be far more stuffed than it is. If, on the other hand, it did not have California, it would be the same old big bombproof economy bailing everyone else out.

        • It is beginning to look like not only are the only cities in the USA that had low restrictions on fringe development are the only cities in the USA that escaped a price bubble; it is that these cities are the only cities in the WORLD that will be seen in hindsight to have escaped a house price bubble.

          If there is a single international factor that can explain all this, it is the fashion for urban growth containment since CAGW and CO2 reduction alarm set in. “Supply” elasticity has been reduced to the point where demand swamps it, prices start to rise, and the speculators leap in and the whole thing goes critical.

          Germany has a very good housing “supply” system that minimises “planning gain”, which is the crucial factor. Read Oliver Hartwich and Alan Evans’ “Bigger Better Faster More: How Some Countries Plan Better Than Others”.

          But Germany seems to be endangered now by having its entire urban supply swamped by international investors flying to perceived safety.

          Italy may be an example of a market with sufficiently elastic housing supply, to avoid a price bubble. This is because an amazing amount of housing there “just gets built” illegally, and then the right people are paid off retrospectively if it proves necessary……

  4. I am stunned to read the intro by the NZ deputy PM, it is incredible….could you imagine a senior cabinet minister in Australia doing anything like that. Even the housing minister is clueless in this country. Massive respect to Bill English.

    • Yeah, just imagine the tarring and feathering any politician in Australia who made equally observable about here would get from the vested interest groups who control the media et al.

      It should be raised in the coming election campaign – I would wager good money housing affordability barely gets a look in.

        • I know that mate – there needs to be a party highlighting that ordinary punters are slipping the specufestors a fistfull of dollars to play parasites

    • The current NZ government is really the envy of Australians… I would not be surprised if our little cousin across the Tasman will have better socio-economic results in the future.

        • Most of jobs in Port Macquarie are low paid hospitality or retail jobs. There are no many highly paid professionals there besides some medical stuff.
          Low median income there is consequence of low wages, not so much density of retirees. Average wage (number not affected by retirees) in Port Macquarie is almost 20% below the national wage.
          Even Average Superannuation and annuity income is lower than in the rest of country.

          • Yes, but plenty of cities in the USA have a below-average median INCOME level but still have a median multiple house price of around 3.

            In general, people will cut their housing cloth to suit their incomes, and the median multiple will remain at about 3 IF supply is not restricted. Rising incomes in non-supply-restricted cities over the decades, has resulted in more lavish housing and larger sections. It is not as if the rising incomes have resulted in median multiples falling and spare income being spent on other things instead.

            On the other hand, if supply is restricted, even very low income cities with very miserable third world housing, have very high “economic land rent”, meaning that even the smallest plot of legitimately purchased land can cost many times the median income. Apartments in most Chinese cities are ridiculously expensive, they are many times as expensive as apartments in Houston where incomes are much higher.

  5. This “median multiple” idea doesn’t seem like the right approach. It doesn’t take into account the spread of prices. If house prices are widely spread around the median and incomes are narrowly spread around the median then that area would be very affordable as people looking to enter the market should be able to find a place pretty cheaply (even if it’s in a run-down/shabby area).

    Sure, you could make an argument that the distributions are a determined by a single parameter, but has anyone actually looked at that? I think you’ll find that the distribution of prices and incomes is different for different locations and the single parameter ansatz won’t hold.

    Too often economics professionals look at averages or aggregates without considering the actual distribution being sampled.

    • So someone should re-do the exercise using average prices divided by average incomes? Then criticism could be raised that this is distorted by an unusually long “tail” in the income or price data, at the high end or low end.

      The institutions named by Demographia as recommending the median multiple, do so for a good reason.

    • I think anyone who understands a bit of statistics know about the limitation you mentioned above. Nobody in their right mind will say that median-multiples measurement is perfect or ideal but looking at non-existent better and more objective alternative, I guess Demographia has done good job.

  6. More spin from Demographia, as usual promoting a narrow pro-development perspective on desirable urban form and housing market structure, and admitting of few alternatives.

    Leave out most non-Anglosphere markets (ie most of the world) – maybe it is just too hard to spin the facts favourably outside these markets? One thing – state intervention – seems always to blame for high housing prices.

    I’m sure we all agree that the housing market is extremely complex. I suppose ignoring many of the other obvious variables that might also contribute to housing prices – try housing size and quality and the desirability of a location just for starters – might enable a favoured barrow to be pushed, but it doesn’t help provide very useful information that could lead to better market understanding or informed policy.

    Demographia’s work is widely challenged, for good reason. A quick look at urban geography or urban planning – believe it or not, such disciplines are not all populated by left wing ideologues any more than economics is captured by rabid right wingers – explains the range of concerns with Demographia and their annual PR report for open slather development.

    • “….. try housing size and quality and the desirability of a location…..”

      Sure: the UK has far smaller houses and exponentially smaller sections, and still has unaffordable housing. The longer urban growth containment planning is persisted with (the Poms have been doing it for 6 decades) the worse the housing becomes along with the price relative to incomes rising.

      Even “location efficiency” enjoyed by average households declines rather than improves. Check out the average commute to work time for all cities in the UK, and compare it to the planners hated “low density sprawl” cities with affordable housing in spite of the vastly greater space per person like all the US cities with median multiples of around 3.

      Average commute to work times are LOWER in the affordable, lower density, “sprawled” cities. This is because congestion always more than negates the trip distance reduced by having higher urban density, AND the higher the prices are where most of the jobs are, the further away young people have to locate to be able to afford a home at all.

      It is long past time for the planning profession to wake up to the evidence and stop imposing needless harm for none of the alleged gains.

      • They’re cramming 60m people on a small island. To a large extent, they must restrict residential land or lose any hope of food security.

        • If they are paranoid about food security, why are they busily relinquishing political power to Brussels and generally going along with utopian trans-national “brotherhood of man” agendas? And parties like UKIP are condemned as a pack of right wing nationalistic nutters?

          But the UK is about 8% urbanised, and could still feed itself even if it became 16% urbanised. It has been retiring all its most marginal farmland for decades, and increasing the area devoted to national parks. There is an incredibly authoritative book on this, “Land Use and Living Space” by Robin Best.

          “The Norman Borlaugh revolution” has improved food productivity in the UK since WW2 as well as making India and China and numerous other once-famine-stricken countries self-sufficient in food.

        • But regardless of the arguments “for and against” the UK doing urban growth containment, the outcomes of the policies after 6 decades of it are still an object lesson for other nations pursuing the same policies at a time lag of a couple of decades. It would be tragic indeed if Australian housing ended up like Pommie housing, considering the difference in “spare land”.

        • As I wrote a few days ago, you could give every single man, woman and child in the UK a quarter acre *each*, and 75% of the country would still be empty.

          For a more local example, if we “squashed” every single person in Australia into Tasmania, they’d each have about 3/4 of an acre to themselves. Or around 3000m^2 in new money.

          Heck, we could probably jam every household in Australia into the ACT and they’d only have marginally less space each than the 400m^2 postage stamps a typical subdivision uses today.

          There’s plenty of space.

      • Of course none of the vested interests who capture economic land rent in the billions when urban planning forces the prices up, have an “agenda”…?

        For Pete’s sake, it is disgraceful that the advocates of liberalisation and the reduction of economic rent-seeking and wealth transfers, are the ones most accused of “having an agenda” by the other side. It is not a case of the pot calling the kettle black, it is the charcoal calling the stainless steel benchtop black.

        • And the other said that Demographia uses spins in their reporting. I guess the reports from RBA (master of the banks) and RPDATA / HIA are mostly free of spins ?

    • Yep, Demographia has always frustrated the ‘professional posters’ who participate here and elsewhere. There have been no end of attacks on Demographia from these guys in the past (here and elsewhere). These same posters seemingly have no criticisms of RP Data, Residex, et al so it’s pretty obvious they see non industry-generated analysis of the property market as very threatening to their interests.

      • Got it in one. The frequent attempts to discredit Demographia are more tiresome each year, although they do make it obvious that it is any notion of Australian property being unaffordable is highly offensive to the views of their paymasters.

  7. “In addition to higher costly housing costs relative to incomes, the higher densities in urban containment markets are associated with greater traffic congestion and longer average work trip journey times.” Can this be true? Witness bulging arterial roads in our capital cities. Expanding urban boundaries is a simplistic argument, and does not take into account the intangibles such as a healthy and attractive regional landscape. Expanding boundaries means reductions in all other space needed to support agriculture and biodiversity- using a debatable premise such as the quote above is simplistic and frankly places cheap housing above all other priorities.

    • Australia, and most other english-speaking countries, hardly have a shortage of land. As for traffic congestion, it stands to reason that highly concentrated (centralised) locations have higher congestion than sparsely populated locations.

      An interesting documentary, America Revealed, tracked via GPS the travel movements of a group of families living in one street in Dallas Texas over a week. It showed that all families lived, worked and socialised in their local area and not one ventured into downtown Dallas over the period. This is how more de-centralised, sparsely populated, cities tend to work.

      • Exactly, Leith: I just said above:

        “…..Average commute to work times are LOWER in the affordable, lower density, “sprawled” cities. This is because congestion always more than negates the trip distance reduced by having higher urban density, AND the higher the prices are where most of the jobs are, the further away young people have to locate to be able to afford a home at all…..”

        Plus, as you say, the dispersal of employment has kept trip times low, and there tends to be little incidence of households being “priced out” of any particular location most efficient for both wage earners and school children.

        There is scarcely any myth less supported by factual data, than the myth that higher density cities with better public transport have shorter average commutes.


  8. What is clear from the data is Australia’s leadership. This is something everyone from the PM to Collingwood supporters understand and endorse. Leadership. We may be impoverishing our young, stifling families, trapping the elderly and enriching banks, but no one, NO ONE!, can dispute Australia is showing leadership.

    Be proud, citizens. Accept the sacrifices your nation asks of you. Shoulder that mortgage with a smile, because we punch above our weight.

    Only a sniveller would say – Don’t Buy Now!

      • +1

        There is a space in the political landscape for a party whicj is prepared to have an honest dialogue re housing affordability.

      • The contradictions in housing policy are difficult for The Greens too. I say this not to criticize them, but to help this forum see just how torturous this arena is.

        The Greens want higher density AND livability (code for elbow-room, community gardens and bicycle paths which offset much of the gains available in high density)

        The want to reuse existing structures to reduce building waste BUT re-purposing existing structures severely limits density.

        They know high density buildings – lifts, air conditioning, large northerly windows, underground car parking – are giant energy suckholes.

        They want better public transport and civic services for all, but steer away from discussing the tax measure (State Land Tax) that would recycle government investment.

        They want refugee migration but a stable population.

        Soooo much easier for the Liberals who just say ‘let ‘er rip!’ which is not a policy, but an abdication.

        • There will come a time when the cognitive dissonance you cite in The Greens will cause the party to fragment.

          I’ll be voting for the “True Greens”: no coal exports, low immigration, low population.

          • I reckon the Greens’ main problem with urban sprawl is the fossil fuel usage (through cars) that it requires.

            I think in an environment of electric cars and high quality, high speed rail links between centres, they’d be able to get behind lower-density housing, especially if it came with environmentally “neutral” houses (from an energy usage, water usage, waste disposal, etc, perspective) and people being encouraged to grow their own food.

  9. The moral of demographia reports is buy in unrestricted development markets and then run for office on the basis of moving to smart city/urban consolidation/anti sprawl policies. You would, based on Demographia’s central thesis, be able to double real land prices in 10 years!

    • You got it. Read “Your Home” by Gary Allen, 1974. Back then, Gary Allen was trying to warn Californians about certain Rockefellers who incidentally were major property investors, who were funding and pushing “land use planning” policies…..

    • anywhere south of Sydney is deemed mexican … hence probably in the 1970’s would be my guess …

  10. Seems to be a lot of ‘new users’ posting on this topic who we’ve never heard from before. And it’s strange how they only choose to comment on residential real estate publications. Oh wait, its even stranger how all of them are arguing the opinion that it shouldn’t be trusted. What a (highly expected and predictable) coincidence!

    Give me a break. Its pathetic enough to be doing it, let alone to be so transparent as to only comment on this story. At least ‘dam’ tries to hide their agenda by making regular comments.

  11. Haha I would have just kept quiet if I was you. I don’t think you’re very good at this game – but if you’re interested in perfecting your craft there’s more than enough examples already here to learn from.

        • It was something to the effect of

          housing isnt expensive here
          Demographia are a pack of world end nervous nelly pimps
          MacroBusiness types want a free lunch to go with their cheaper housing
          etc etc etc

          • Tantrum, or crying.

            PhilBest, it takes a big man to cry. It takes an even bigger man to laugh at that man.

        • PhilBest: Within like 1 minute of my original comment he had written ‘Paranoid much?’ Pretty unprofessional astroturfing, no poker face at all.

          “Just because you’re paranoid doesn’t mean they’re not out to get you”

  12. I suggest MB puts up a tag for every known astroturfer /sock puppet beside their name every time they respond. At least this way those who wish to engage in an honest discussion can skip the useless parts written only to derail the thread.

    • Mining BoganMEMBER

      Nah, leave ’em here.

      It turns the place into a little Shakesperean drama, except nobody carks it in the final act.

      • So, we must allow known trolls to deflect debate from substantive issues. This is called free speech.

        Rather than a harmless and costless act of generosity, this unselfish liberality is used against the citizens of Australia by rent seekers.

        You, sir, need a ‘harmful if swallowed’ warning.

          • I found the 3 Laws of Robotics of interest but David Langford’s version captures my position more accurately:

            1. A robot will not harm authorized Government personnel but will terminate intruders with extreme prejudice.

            2. A robot will obey the orders of authorized personnel except where such orders conflict with the Third Law.

            3. A robot will guard its own existence with lethal antipersonnel weaponry, because a robot is bloody expensive.

            The third point is the point!

          • dumb_non_economist


            Whatever the merits of some of that thread you have linked you do yourself no favour on wanting to drag it back up, and in my opinion it shows no hidden agenda for DC, but does show a lack of judgement on your behalf for continuing it.

          • Oh good, you kept a copy. Study it. Learn.

            3d1k, you acknowledge your existence is for sinister intent. You are NOT an agent of government and NOT authorized to interfere with civilians, not matter how they behave.

            I yesterday demonstrated that an avatar has no value. Would you like to spill some more hydraulic fluid?

          • dne, rest assured I have made my point – Collyer knows it. The link will not reappear.

            DavidC, your logic in regard to avatars is deeply flawed – after you readily thank or congratulate ‘avatars’ that hold the same view as you. Those that don’t are apparently fair game. Robots even! You ridicule the ‘anonymity’ of those hiding behind avatars yetsthe bulk of the comments here at MB are indeed by those choosing to remain private. You chose otherwise, no doubt believing it would enhance your professional position…

          • I sympathize with private citizens craving anonymity. We should respect their privacy.

            I am public so any reader can trace me, hold me to account – which is why your avatar is a conceit. It shrouds commercial interests acting in concert, as a cabal.

            My logic around your trolling is impeccable. My proofs were a little confronting, but you haven’t forgotten the lesson.

          • Lol. Proofs? You possess neither the mathematical nor philosophical integrity to demonstrate such.

            Yours was a rant, pure and simple – and an offensive one to boot.

            The lessons to be learned are all yours. The first would be to drop the conceit and concede you made an outrageous and unjustifiable claim.

            Recant. Repent. Reform.

            As a gesture of magnanimity I shall patiently graciously await your conversion.


          • dne, before i sign off – you say the thread above shows no hidden agenda for DC. Wrong. Completely wrong.

            Collyer’s motivations are driven by his Georgist leanings, his total conviction that taxes should be shifted to a land base (including exorbitant rents applicable to resource applications – most of which are moderately profitable at best, borderline more often and only in recent times have achieved attractive levels of profitability considering the huge infrastructure investment and volatile commodity cycle inherent in resource investment.

            He bangs on about housing but he hates the miners. This is a hidden agenda. The vitriol Collyer expressed in the thread can only come from a zealot in grave danger of losing grip from reality.

            Read it again.

          • I cannot allow your misinformation at 10.22 to stand.

            My advocacy of removing taxes from wages and business and taking public revenues from economic rents is highly public – there is no hidden agenda. It dovetails closely with Ken Henry’s Australia’s Future Tax System, which urged the RSPT, LVT and the removal of 125 very bad taxes (I simplify mightily, economists). Henry demonstrates in AFTS why the mining tax would not discourage mining except in very marginal cases. Read it.

            I am angry with the miners for not merely fighting the tax, but for their deeply funded actions to defeat the ALP government. This is foreign companies treating a great democracy like a banana republic.

            And when one of their spivs opposes something as important as the RC into Child Abuse for partisan political advantage, I am going to kick his avatar’s head in.

            Got it?

          • DC – you have the balls to put your name and thoughts out there on an important social issue. There is an ocean of difference between you and a shill for foreign capital that is paid to twist the issues.

          • David. Are you in possession of your faculties? Do you have that fleeting and unsettling feeling they are abandoning you? Take a deep breath.

            Pause. Consider.

            The Henry Tax review fulfilled ‘political’ desire to be seen to be doing something. The Henry Review resulted in a multitude of recommendations, most of which we know will never see the light of day. This is a political decision. The Henry Tax Review shall join the Asian Century White Paper on a lonely shelf in the labyrinths of Parliamentary archives.

            Your anger is yet again misdirected. Of course the resources companies opposed the RSPT. Yes, I was a small part of the campaign against the tax. It was a badly drafted, poorly conceived appropriation. The tax is better portrayed as one of the world’s Great Democracies acting as a Banana Republic.

            Lesson II: Direct anger appropriately.

            I refuse to discuss your final comment until an apology is extended. It is obscene.

          • aj, do not be deluded – he his there in name for public gain – he aspires to political career. Read his absurd offensive allegations, then comment.

            ie: The miners are worse than..well you read it, he said it. Where you put yourself in relation to that allegation I wait to see.

            FFS. Read it.

          • 3d – I did catch some of that thread before I tuned out, and what I saw was you reaching an even more sickening low than ever.

          • Then aj you stopped to soon. Where was my low? Collyer said, to paraphraes ” the miners have effected damage that TOWERS OVER CHILD ABUSE”

            Collyer lost me then and then. Is that where he gained you?

            Seriously. Think about the implications of that.

          • I’m out of here.

            This is a microcosm of Australian politics where the ends justifies the means – the most horrific of claims can be made – and adherents to a certain political perspective see no wrong…and yet it is soooo wrong. Is this the future of political debate? A take no prisoner exploit any vulnerability, even if violence against a child. For political gain?

            I’m out of here.

          • I’m out of here.

            Woo hoo!! This calls for a celebration.

            3d1k, If you want to represent corporate interests, you should come back and sign on with your real name.

            Despite the Citizens united ruling otherwise, corporations are not people. They do not have a right to privacy or a vote.

          • I’m beginning to think the minebot must be striking out into a new veture selling distilled crocodile tears.

          • We have just arrived at the nub of the issue, the equivalence of the behavior of the miners with the rape of children in institutions.

            Imagine the RC decided to compensate 10,000 shattered souls with an ex gratia payment of $2 million. This would allow us to compare oranges and oranges – in money terms.

            The annual $20 to $40 billion in taxes not paid by miners because they defeating the new laws already exceeds that compensation amount.

            I and my fellow citizens have to pay higher taxes from our incomes because miners defeated the elected government. Hence, I can say the scale of damage wrought on the Australian economy exceeds the harm caused to those poor children.

  13. but but but isn’t housing affordability about how cheap it is to service the debt?

    That’s what the HIA/CBA told me. I get all my financial advice from them and mortgage brokers. I also get my dietary advice from KFC.

    Great work again Leith. Keep smacking the trolls with data and logic.

    • All right; re-do some comparisons over time, between Australia and Texas/North Carolina/Georgia, using “mortgage affordability” criteria.

      The USA has VERY low interest rates right now. It would be very very interesting to see how “mortgage affordability” would track, comparing Australia’s exorbitant house prices plus low interest rates, with US affordable cities house prices plus low interest rates.

      I SAY BRING IT ON…..!!!!!!!

  14. Hey leith, I appreciate all the work done by MB thanks. Have there been any work done on the average/median retiring wage comparing countries/cities around the world. Just a tought looking at the above unaffordable locals.

  15. There is a very interesting angle to the mania for “urban growth containment” and public transport-oriented planning.

    When the UK Town and Country Planning system was first devised in the 1940’s, the people who devised it included as an essential element, the compulsory acquisition of fringe land as required for urban expansion, because without this, the prices would rise, fringe land owners would make a killing, and housing would become unaffordable.

    It is a measure of the power that the vested interests in property investment have, that the Planning proposals were all adopted EXCEPT the bit about compulsory acquisition of land.

    There is a massive 2-volume report, “The Containment of Urban England” by Peter Hall et al, 1973; that discusses all this and is a very insightful report. It is quite cheap on Amazon because libraries tend to be disposing of their copies about now.

    Generally, it is an exposure of the economic ignorance of the planning advocates, that mostly they do not see any link at all between their policies and the prices of urban land (or they mistake economic “rent” for “amenity” they claim to have created); let alone advocate for compulsory acquisition of land to forestall it. Of course compulsory acquisition of land should be justified if their claims about the need for growth-containment urban planning are justified (existential threat from global warming etc).

    Another elder statesman urban economist who has commented on this aspect, is Anthony Downs, who said, in “A Growth Strategy for the Greater Vancouver Region”, 2007:

    “……The cost of land poses a key dilemma for urban planners everywhere who want to concentrate jobs together so they can be best served by public transit. Such concentration raises the costs of land near centers; in fact, it would confer a monopoly advantage on landowners who owned such land and could exploit firms trying to locate there. Then firms will want to locate elsewhere to cut their land costs.

    Planned concentration of jobs in a few centers is not consistent with private ownership and control of land. Some type of collective control over that land would be necessary to prevent monopolistic exploitation of land values. In theory, this could be done with high land taxes in such areas and special zoning rules. But adopting those devices is politically difficult in a free enterprise economy…….

    “……A similar but less intensive dilemma concerns land near transit stops, where it would be most efficient to concentrate high-density housing and jobs. That also creates ownership monopolies over such land unless it is specially controlled or taxed. Yet focusing development near transit stops is a key to using more transit…..”

    The famous econometrist and land economist Colin Clark made the following argument in one of his last books, “Regional and Urban Location”, 1982.

    “…..If rail and subway services to the center of large cities were charged at full cost….two consequences would follow. The employers of the lower paid workers in the city center would have to raise their wages, reduce the level of service offered, or move to suburban locations……Meanwhile the higher paid……would have an incentive to move their residences closer to the center…… .

    “……These movements would have their reflection in the price of land…….In net effect, the subsidies on rail and subway transport are subsidies to the owners of certain types of land – for which there is no social justification. …..”

    In “Downtown: Its Rise and Fall”, Robert Fogelson points out that once entrenched, downtown business interests would act to prevent its decline. This meant, as the 20th century progressed, attempting to prop up its status as the preeminent retail and office center of a metropolis. Radial fixed-route public transport networks focused on the core were and have continued to be a popular tool for this purpose.

    • But of course including compulsory acquisition of land as part of the program would result in the main vested-interest supporters of the planning policies, becoming opponents of it…..

  16. Arguing for cheaper housing is arguing in favour of more income and wealth to those who don’t already have housing which is very generally speaking those under 25 and the bottom say 20% of those over 30 and against those who own houses and other real estate, particularly those who have high debt.

    It might also be said to be in favour of those whose parents won’t be leaving a half a house for each child before the child is say 40 and against those whose parents will.

    It is also arguing against those who have bought and paid for their houses and are now retired and whose children are able to afford decent houses without parental cash flow assistance.

    Most things proposed/argued for have adverse effects on someone or some sector, whether it be interest rates, housing costs or the relative value of the AUD.

    Most economic arguments appear to me to be sectoral/demographic/public vs private/socio-economic group rent/advantage seeking.

    • In general, the DIFFERENCE in the cost of urban land relative to incomes and GDP, between different cities, IS ITSELF MOSTLY ECONOMIC RENT.

      In general, it is best for this to be as minimal as possible, so that the various transfers you describe above are smaller rather than larger.

      Of course the beneficiaries of LARGER transfers under the “higher land rent” situation, are much more incentivised to protect their gains, than if the land rent was lower in the first place. As all rent seeking activity is dead weight loss to economies, my money is on the low land cost cities for economic performance into the future.

  17. I’m not saying that I agree but Warwick McKibbin and Ross Garnaut in separate interviews last year (ABC Business Late Line) both said that Australia does not have a housing bubble and or affordability crisis or words to that effect. I was particularly surprised with Ross Garnaut’s assertion that there was no housing bubble.