Sydney's Housing Disaster

Part 1 of this article is found at http://www.financialsense.com/fsu/editorials/2007/0420.html

Sydney's Housing Disaster

Sydney is suffering a housing crisis. Housing has become so expensive to buy or rent that many families cannot afford independent housing. In Sydney and most other places in Australia an average family can no longer afford to buy an average house.

In response to the crisis, many young adults have delayed moving out of their parents' homes, some younger buyers are pooling resources (eg two couples buy one house) and outright homelessness has increased with charities reporting record numbers of homeless people in Australia.

In crisis there is opportunity and landlords have responded by raising Sydney rents to a high percentage of average earnings, and by creating an unprecedented number of illegal half-houses to rent to people desperate for even half a house to live in.

Since Australia's population now exceeds 20 million, and we now have less than 100 acres of land per person, some people believe that this acute shortage of land is what has driven housing to unattainable prices for an average young family.

I think the housing crisis is not caused by a shortage of land, but by a shortage of govt permission to build houses. Govt has simply given permission to build fewer houses than are needed to house all the families here. It's that simple. It is a monumental failure by central planners.

This article is about more than just a planning problem in one city. It is about ignorance of markets and price, and the absurd things people believe about economics. I recommend the article to all readers with an interest in these things, particularly part 1.

The housing crisis in Sydney is duplicated throughout the world where similar views and policies are found. Every Australian capital city is affected, as are parts of New Zealand, the United Kingdom and parts of the USA. I recommend this entire article to all readers who are concerned for poorer families struggling to pay for housing in these places.
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