Post #2330382

#AlboPM has consistently argued and recently publically confirmed that he believes the #HousingCrisis issue is a #SupplySide problem (I.e. cut red-tape and throw enough money at the problem and it be resolved). Well, here is something that shows us not only how wrong our #PM can be, but how stubbornly he holds on to his opinions no matter what (a behaviourly trait that will, I foresee, bring his undoing as leader of the #Labor party): “…right now, more than 100,000 approved dwellings are sitting unbuilt across New South Wales — not blocked by councils, not caught in red tape, simply not viable in current market conditions. The planning system approved them. The market didn’t build them. The Reserve Bank’s own empirical modelling, published in 2019, found that a 1 per cent drop in interest rates increases house prices by 30 per cent, while a 1 per cent increase in dwelling stock reduces prices by just 2.5 per cent. Given that new supply adds barely 1 per cent to existing stock annually, the supply-side arithmetic has never come close to explaining observed price movements. Those are explained by credit conditions, investor demand, migration levels and macroeconomic cycles — the demand-side levers that sit entirely outside the hands of council planners.” And another nail in the #MarketsKnowBest coffin of #NeoLiberalism Read. More: https://thepoint.com.au/opinions/260505-abundance-and-why-trickle-down-housing-economics-just-admitted-what-town-planners-always-knew #AusPol