New podcast. I discuss housing policy with NAB's Phil Dobbie. shows.acast.com/morningcall/... - ThreadSky

petertulip.bsky.social • 28 days ago

New podcast.
I discuss housing policy with NAB's Phil Dobbie.

https://shows.acast.com/morningcall/episodes/housing-costs-its-all-a-question-of-supply

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akorsyd.bsky.social•27 days ago

Great Discussion, great questions, and several solutions all worth implementing.

But I put it to you that building for profit (private development) is not enough as it will simply plateau supply to where margins are optimal. CRA too propagates that position and that we need public supply too.

petertulip.bsky.social•27 days ago

To build to where margins are optimal will require an extra 1 or 2 million new homes, above what we ordinarily build.
That should reduce prices and rents (including for low-income renters) by a third or more.
To where price = marginal social cost.
Let's argue about whether that is enough then.

akorsyd.bsky.social•27 days ago

Inherently that is where the problem lies. No amount of zoning reform will get us there when developers are waiting for Goldilocks condition (including now) - when we desperately need supply. And ultimately we will continue to fall short. Other issues; yes, but that is the crux.

petertulip.bsky.social•27 days ago

Auckland and Lower Hutt (most clearly), and Tokyo, Minneapolis, Austin, Houston, etc (less clearly) allowed more building, which led to large improvements in affordability.
Why would we not expect that here?
Builders want to build.

akorsyd.bsky.social•27 days ago

I’m aware of these examples. The thing I struggle to understand in Sydney context is high cost of construction has held home ownership (loan cost) at 45-48% of disposable income (very high!). But this has been consistent for 30 years; from when house price growth began deviating from wages.

1/2

akorsyd.bsky.social•27 days ago

Yet builders will only build when construction costs are low or under better market conditions; where purchasers can hit that very high mark ie. where purchase cost = upper limit of borrowing capacity (as noted above).

Planning won’t solve that (?). Not that it doesn’t have a role to play.

2/2

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