The Australian Government has come out with another “brilliant” idea on addressing the burning question of housing affordability – capping population growth in capital cities of Australia.
Instead of dealing with the issue of lack of affordable housing, our government is considering restricting people’s ability to live where they would like.
What will be introduced next, a cap on the number of children we will be allowed to have, number of properties we will be allowed to buy……what happened to allowing the free market forces to function as intended?
These views are further supported by a report commissioned by the developer group Urban Taskforce, which has warned the government against freezing growth in major cities as it pursues a sustainable population strategy.
If the government makes a decision that capital cities are full, workers would be discouraged from settling in the cities, feeding into lower house prices, the MacroPlan Australia report says.
Urban Taskforce chief executive Aaron Gadiel said the government should resist severely restricting capital city growth.
“(The government) could – if it wanted to – prevent new home construction, restrict new infrastructure investment or stop immigrant settlement,” he said.
“The loss of workers would hit household income, which would feed in to lower property prices.”
It will however also have other negative impact on the economic indicators of our cities.
The report estimates that strategy would lead to a 15.3 per cent decline in house prices over 10 years in Melbourne.
In Sydney it would mean an 18.3 per cent decline in house prices over a decade.
A much healthier approach would be to allow the construction of sufficient housing in the areas where people would like to live – ie regulate property prices through the volume of available properties not population
Population Minister Tony Burke has said the government will be announcing a sustainable population strategy within months, and his department is considering public submissions.
Mr Burke has previously rejected national population targets.
The report comes after a Monash University study found huge demand for housing on Melbourne’s fringe was pushing up prices.