It seems to be dawning on some voters and political players that if housing is to be made affordable for young Australians, the price of land must fall.
A large constituency of older voters see their house as their major asset and do not want this.
Many are worried about whether younger generations can aspire to own houses. That's in principle, of course, as is the wish that economic conditions change so that younger Australians can get a foothold in the market. But they are not keen on seeing this occurring at their family's expense.
Excuse thus some moments of panic as house prices slow, steady and begin to fall. It's already happening in the major markets, and some predict falls of up to 10 per cent from recent peaks. That is still well more than price inflation over recent decades.
But though wealthier Australians have been quite resistant to being taxed on capital gains until they are realised, they have counted on appreciation, in many cases of more than $1 million, and, as a primary dwelling, free from capital gains tax. They have decided, moreover, that they want to die with that house value and their superannuation largely intact rather than exhausted, so that they can pass it on to their descendants.
They may have helped subsidise their children's access to the housing market but will not be happy if they come to see a loss of, say $100,000 in land value as a disinterested contribution to younger Australians in general.
Older Australians will be encouraged by some politicians to see falling prices as a wider grab for their income and assets. Such campaigns will encourage them to see political parties purporting to speak for younger Australians as the enemy. Wealth in Australia is overwhelmingly concentrated among the old, and not only because of housing assets.
As Baby Boomers are starting to die, a major generational shift in this wealth is beginning, but alas, it may not have a big impact on access to the housing market for younger Australians. This is because much of the wealth will be moving to the children of the Boomers - many already approaching retirement age - rather than grandchildren starting to form families and seek mortgages.
Right now, falls or signs of a steadying market are not yet because of new power in younger investors. They reflect uncertainty and a lack of confidence. Signs that the market was past its peak have encouraged many who were thinking of selling to cash out now, even as others have been reluctant to enter the market until they see what is happening. The biggest problem remains that industry is not turning out enough dwellings to satisfy demand.
That's first a problem of labour supply, but also, some insist, a problem of bureaucracy, delay and planning rules. Treating the consequences of years of inaction as a crisis has armed many of the players with what they consider to be a mandate for radical change.
Or they can only think of one thing at a time - build more houses. At risk is a focus on building sustainably and for a changing climate, and we end up with whole suburbs of houses with black roofs that will prove to be heat sinks for their residents.
Politicians might be giving themselves permission to fundamentally change the amenity of communities, to ignore old rules said to stand in the way of progress, and to drop much focus on integrated transport solutions, upgrading of water and sewage services and the location of employment opportunities where people live.
Once almost a central aspect of the work of state and local government, it's as if it is now all too complicated, or of too little priority compared with the urgent need to build more dwellings. The ideological ancestors of politicians such as Anthony Albanese were men like Tom Uren, interested in urban and regional development serving social, economic and cultural needs and the development of self-sustaining communities.
Land and housing, whether in greenfield areas or in inner-city areas open for redevelopment, were able to be provided much more cheaply than now, even if with high levels of immigration and population growth. And this was happening alongside major public investments in school, technical and university education, hospital and health facilities, and aged and child care.
The neo-liberal phase of letting the markets rule, of allowing the private sector to set planning and building standards, supervised largely by themselves, has occurred at significant social and economic cost.
In city states such as the ACT, moreover, it has seen politicians manage their land holdings to maximise its revenue rather than to satisfy need, and to sell off much of its stock of government housing for no net community gain. The quality of both public and private infrastructure has declined. And so, of course, has the quality of maintenance.
There are some who suggest that one of the reasons for higher housing costs has been the propensity of the Baby Boomer generation to demand that no further development occur in their suburbs once they have settled.
The NIMBY phenomenon - not in my backyard - and the NOTE - not over there either - is said to have forced up costs and, at least until infill policies, forced new house buyers further away from central facilities.
Perhaps to a point. But it has also been a function of building bigger and bigger houses with fewer and fewer inhabitants. The average new Canberra house for example is at least twice the size of the average 50 years ago, and, with or without solar power, has about three times the environmental footprint. The NIMBY phenomenon has also been a response to the crassness and lack of fit of many development proposals.
The neo-liberal response to the anti-red tape brigade involved politicians showing no compunction in lowering building standards.
In the last quarter century many more shoddy and unsafe houses and flats have been built to a quality lower than 100 years ago, if at a higher real price. They have also lowered planning standards and quality control standards.
Inspections and supervisions have been privatised, and consumer capacity to get redress from incompetently built, or unsafe and dangerous buildings, has declined.
Government takes little responsibility for outcomes and gives significant incentives to developers, especially those who pretend that they are building significant proportions of social housing.
As the ICAC inquiry in NSW is showing, and as a royal commission in Victoria will soon be demonstrating, corruption in building and development is rife.
That's a function of slack controls, but also of the corruptibility of state and local government regulators, and the inside access that some of the major players, including building unions and favoured developers, have to senior politicians.
It is only now that incentives to new buyers are being focused on the development of new housing, rather than bidding up the price of existing housing. A good many housing grants schemes, or cruel frauds such as the giving of access to superannuation savings, have supposedly been about putting more money into the hands of poorer bidders. But they have still been at a disadvantage, and the resulting higher prices have simply widened the gap.
It would be nice for those owning homes if prices settled down to levels where they could still feel smug. Now, for example, average prices seem to have dropped to about 2024 levels.
Despite the campaign being run by The Australian there does not appear to be a freefall happening. That means that housing is now somewhat more affordable than it was six months ago. But millions of young Australians are still frozen out of the market, with little hope, at such prices, of ever being able to get in. Prices would have to fall at least a further 10 per cent before affordability, based on today's incomes, was back to the levels of 15 years ago.
How house prices move in the short and medium term depends much more on whether government and the private sector can find the labour to build houses and flats on land that is already serviced and available.
Around the states and territories, premiers and chief ministers are galvanising around supply, including freeing land that has been in public hands, promoting the turning of existing buildings into housing stock, and permitting new types of infill.
But the labour force, and to a lesser degree, the building materials are not yet there even to meet past promises made at different levels of government. One cannot, of course, suddenly train 50,000 Australians to become carpenters, electricians, plumbers and builders' labourers. Even with lower standards and accelerated training schemes, there would be many lags.
But there is a more fundamental problem. We have virtually full employment. So where are we going to find those 50,000 people?
From what industries and what existing employment are they going to be recruited, or, perhaps, conscripted?
Even if Australia already has enough Uber drivers, nail technicians and call-centre operators, as Pauline Hanson suggests, these are not around in such numbers, or with skills readily adaptable to a building site, as her dog whistle suggests.
It is inevitable that they must come from overseas, whether as migrants or on short term visas. Those, whether in One Nation or the Coalition, who pretend that immigration, population and industry policy can be settled simply by picking a number lower than the one put forward last week are kidding themselves. If they insist that the limits are important, if only for symbolism, younger Australians will simply not get the houses they need. It won't be a matter of not being able to afford them. They simply won't be there to be bought.
The recent census will confirm that Australia has lots of splendid houses now lived in by too few people. But policies encouraging people to downsize have not been terribly successful.
They tend to underestimate the cost of shifting accommodation, and pay too little attention to the fact that downsizing folk still prefer to live in their old communities, near familiar facilities and established friends and family.
The disincentives for staying on - in the sense of costs and rates being shared among fewer people are obvious enough, but the equations and the incentives need work if there is to be a significant increase in the housing stock - which is to say, more people, or bigger families in existing dwellings. The trend to smaller families, indeed to the three-person (one child plus two parents) suggests that a big program focused at helping elderly folk move on to apartment accommodation may not make a significant difference.
Unless, that is, Australians adapt to new types of households, perhaps with more generations, or more non-relatives present.
Perhaps we must push on in meeting the housing shortage. But we should also be addressing wider aspects of our urban problems. Have we factored in work from home or smaller households into our estimates of what the new urban communities will look like?
And changes to ensure more sustainable and self-sufficient dwellings?
Can we make our heat loss and our water use more efficient, and provide our own electricity?
Do we need houses of ever-expanding size? Should we have, as developers seem to have inferred, houses like office blocks, intended to be demolished as obsolete in 25 years?
Can Australians aspire, as once they did, to backyard cricket and two or three car spaces per building block, or is that an indulgence we must forgo?
Housing policy is much more than merely a tax policy or an issue to be ticked off before the next election. It is about how we live and who we want to be.
