Taming the Elephant in the Economy
Published: 15 June 2021
Policy briefing
Recommendations for immediate institutional reform to stabilise Australia’s dysfunctional housing market.
Australia’s property market is a threat to the nation’s economic future with soaring house prices driving inequality and damaging productivity, according to the report. It recommends immediate institutional reform to stabilise Australia’s dysfunctional housing market, including a Royal Commission on Housing Future Australia, a new national housing strategy and agency, and a permanent housing committee as part of the National Cabinet.
“Australia’s approach to housing policy has fuelled income and wealth inequality and created significant economic instability. This is becoming a huge drag on productivity, and warping Australia’s capital investment patterns. The scale and complexity of the problem demands [in particular] that a Royal Commission be established to investigate how to defuse the time bomb and create a more effective and equitable market for all Australians.”
Housing: Taming the Elephant in the Economy was presented to the Housing and Productivity Research Consortium, and highlights informed opinions of 87 leading Australian economists and other housing market experts on the impacts of housing system outcomes on Australia’s economy. The report advocates far-reaching changes to re-shape Australia’s housing system and remedy damage to economic productivity, reduce exposure to financial instability and stem rising inequality.
Report lead author, UNSW City Futures Research Centre Honorary Professor Duncan Maclennan, said the current housing system is dysfunctional at all levels and is an inherent risk to the Australian economy. He said the report affirms that Australia’s housing system is failing increasing numbers of young people, and an immediate overhaul is needed.
The recent explosion in house prices, in particular, brings a fresh and troubling dynamic for younger Australians who are being locked out of the market in growing numbers, Professor Maclennan said.
See media coverage of the report on the Policy Scotland website
Image credit: chameleonseye iStockphoto
First published: 15 June 2021