Lots of coverage of John Rose’s report on “The Housing Supply Myth” in Vancouver. Thomas Beyer sends along this article from the Sydney Morning Herald with obvious parallels.
Claims that simply increasing the number of homes in Sydney will fix the housing affordability crisis have been challenged by new modelling that shows boosting supply alone is unlikely to deliver affordable housing.
Analysis by Australian National University academics Ben Phillips and Cukkoo Joseph has identified a long-term oversupply of housing in many inner Sydney suburbs. Despite the surplus, property prices have surged in that region over the past five years. ….
The ANU report concluded that while increasing housing supply has “some benefits” it is “unlikely in isolation to create affordable housing” in Australia. … The modelling showed the statistical region of “inner-Sydney”, which includes the central business district and surrounding suburbs, has accumulated a “significant surplus” of 5900 dwellings relative to population growth since 2001 – the largest over-supply among 328 regions across Australia included in the study. …
surplus – red / shortage -blue
A record 37,608 new houses were completed in Sydney during the year to March, Department of Planning figures show. That’s almost three times more new dwellings than the city added back in 2008 and 2009. …
“If, as this report suggests, housing in Australia is not in short supply, then we need to find alternative explanations for house-price growth – such explanations would direct policy in applying levers capable of affecting housing affordability,” the report said.
… the ANU report’s co-author, economist Ben Phillips, said often the behaviour of property prices at the regional level “has nothing to do” with underlying fundamentals for housing demand, including population growth.
“Housing is an asset and assets don’t always reflect the fundamental underlying value – it’s not like the demand for ice cream or bananas,” he said.
“Supply does matter, but there are lots of other things at play that can swamp that impact … that means improving affordability is not as straight forward as fast-tracking a bit of supply to solve the problem.” …
Overall, the Australian housing market was shown to have an oversupply of 164,000 dwellings between 2001 and 2017.
Ms Berejiklian made housing affordability a key priority for her government when she became Premier earlier this year and has stated “the most effective way” to tackle housing affordability is to increase supply.
Prime Minister Malcolm Turnbull has backed this approach. In May last year he said: “Now this is how you address housing affordability. Housing affordability is the result of there being insufficient supply of housing. You need to have more supply of housing.”
