A land value tax could fix Australasia’s housing crisis

Posted by Simon Dehne on November 23, 2015 in Latest News with No Comments


New house imagination vision on green meadow. Conceptual image

The major cities of Australia and New Zealand are experiencing an extraordinary wave of speculation in their respective real estate markets. Over the past three years, the median house price to median income ratio has increased by 21.2% in Australia and 18.1% in New Zealand, a rate reminiscent of Ireland’s 20.5% before its housing crash at the time of the global financial crisis.

The rapid increase in property unaffordability on both sides of the Tasman has enriched a number of homeowners and speculators and made countless more eager to join the game. But it has had dramatic effects for businesses and landless families who find it exceedingly difficult to afford a place to live, work or operate.

Unsurprisingly, a lot of column space and political deliberation have been dedicated to finding a solution to the problem. Much of the analysis points to a lack of housing supply at a time of increasing demand as being the main driver of rising prices, resulting in a simple policy prescription: increase the supply of housing.

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