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Land supply in desirable locations cannot be increased; you can zone for increased density in those locations, but developers are not incentivised to release ne

Land supply in desirable locations cannot be increased; you can zone for increased density in those locations, but developers are not incentivised to release new supply as quickly as possible (as that would reduce prices). See for example https://www.fresheconomicthinking.com/p/a-housing-supply-absorption-rate.html https://www.fresheconomicthinking.com/p/a-housing-supply-abs... and other articles on that blog which explain this phenomenon. The property market has too many inherent and imposed monopoly conditions that prevent it from acting as a hypothetical free market where supply and demand are the only factors that influence price. Actors not motivated by profit can increase supply faster than the private sector's preferred absorption rate (e.g. mass state housing projects like in Singapore and Vienna), in which case sure, if the government massively increases supply consistently above demand and only rents or sells in a manner preventing monopoly acquisition then prices (rents or purchases prices) can be pushed down. There are other alternatives (e.g. Georgist style land taxes combined with liberal zoning laws, so efficient use of desirable locations is encouraged and enabled).

freefaler 3y ago
It's not easy, but without building more the situation would get even worse. Low-density houses are nice, but in Australia it's not the most efficient way to absorb the large number of new arrivals clustering in the 3-5 major cities. Cities with higher densities exist and they're not as nice as suburbia, but it's much better than no housing at all.
- freefaler 3y ago
  BTW, after thinking about that more I'm sure that there isn't anything fundamentally challenging with building more supply. The highly parts of existing cities are limited, but as history shows - you build new cities. Population has moved from one place to another for centuries and new cities sprang all over the world. If this was done before it should be done now. Overregulation may be the culprit.
  - BirdieNZ 3y ago
    You can build lots of housing in remote locations, sure, but people have to want to live there. Even existing cities can have massive surplus of housing if people don't want to live there anymore (see Detroit for an example). Most people want to live in existing cities, and particularly the biggest cities (hence them being the biggest). Tokyo is huge because people want to be there; there are cheap houses available outside of Tokyo but people don't want to be there as much. Most of the time, each state or country has a single large city that grows much faster than all the other cities, because people want to be there and not somewhere else. The main "successful" new cities these days are when governments create one for their headquarters (or move their headquarters to an existing smaller city), like Sejong in South Korea. This is because it induces demand quite successfully for government employees to move there. You need a strong inducing of demand to create a new city; existing cities already have strong demand via jobs, other people, and services, so new cities need to outcompete them.

freefaler 3y ago

It's not easy, but without building more the situation would get even worse. Low-density houses are nice, but in Australia it's not the most efficient way to absorb the large number of new arrivals clustering in the 3-5 major cities. Cities with higher densities exist and they're not as nice as suburbia, but it's much better than no housing at all.

freefaler 3y ago
BTW, after thinking about that more I'm sure that there isn't anything fundamentally challenging with building more supply. The highly parts of existing cities are limited, but as history shows - you build new cities. Population has moved from one place to another for centuries and new cities sprang all over the world. If this was done before it should be done now. Overregulation may be the culprit.
- BirdieNZ 3y ago
  You can build lots of housing in remote locations, sure, but people have to want to live there. Even existing cities can have massive surplus of housing if people don't want to live there anymore (see Detroit for an example). Most people want to live in existing cities, and particularly the biggest cities (hence them being the biggest). Tokyo is huge because people want to be there; there are cheap houses available outside of Tokyo but people don't want to be there as much. Most of the time, each state or country has a single large city that grows much faster than all the other cities, because people want to be there and not somewhere else. The main "successful" new cities these days are when governments create one for their headquarters (or move their headquarters to an existing smaller city), like Sejong in South Korea. This is because it induces demand quite successfully for government employees to move there. You need a strong inducing of demand to create a new city; existing cities already have strong demand via jobs, other people, and services, so new cities need to outcompete them.