The Housing Crisis is a Population Growth Crisis

The Housing Crisis is a Population Growth Crisis Michael Bayliss and Jane O’Sullivan Key points • Australia is facing a crisis in the affordability and quality of housing which is leading to increased inequality and homelessness, threatening to shatter the social contract. [...] Australia has had one of the highest rates of population growth in the OECD in the 21st century, due to world-leading immigration levels. [...] The strains of lockdowns, the need to work from home and the opportunity afforded by record low interest rates and a new round of government grants all contributed to this push to move out of shared and family homes. [...] In the words of Reserve Bank Governor Philip Lowe, “it is arguable that the main impact of higher land prices is not really to increase our national wealth, but to change the distribution of that wealth.” Wealth inequality has increased much more than income inequality, and land inflation is the main cause. [...] More importantly, both the number of recipients and the amount of supplement they need are growing rapidly due to the housing crisis.