Housing failures send Aussie inflation soaring

Ross Gittins penned an interesting article blaming housing policy failures over the pandemic – namely the HomeBuilder Stimulus and state stimulus programs – for worsening Australia’s inflation problem:

The federal government offered HomeBuilder grants to people ordering new homes or major alterations. The state governments offered stamp duty concessions to first-home buyers, provided they were buying new homes…

The price of newly built homes has a huge weight of almost 9 per cent in the CPI’s basket of goods and services, making it the highest-weighted single item in the basket. This implies that new house costs have added almost 2 percentage points of the total rise of 6.1 per cent.