Regarding the CPI comparison. Would it have been more accurate to subtract the rental component from total CPI before comparing it to the rental component of CPI? I would've thought it gives a better contrast.
No discussion on affordability is complete without impact of govt regulations. See the section in demographia report about urban containment. (page 16 http://www.demographia.com/dhi.pdf). Fascinating discussion on urban containment policies and sudden increase in land values where containment starts.
Agreed. My reference was the impact of regulations on property/land prices esp. policies that encourage land banking by the state itself and it's impact on stamp duty revenue from elevated prices. Does this make supply inelastic?
After all the voluntary trades are made we are in a market equilibrium. An involuntary change from that point means a symmetrical cost on property owners for every benefit to non-owners
Many of the nations "renters" actually own a house or apartment elsewhere. For instance, most Federal politicians might be "renting" on Census night in Canberra, with juicy tax-free, taxpayer paid per diem accommodation allowances, and also own one to 17 houses elsewhere. Is there any good data on this group?
A side issue is that Members of the House of Reps have to declare the financial interests of their spouses, Senators apparently do not.
Regarding the CPI comparison. Would it have been more accurate to subtract the rental component from total CPI before comparing it to the rental component of CPI? I would've thought it gives a better contrast.
No discussion on affordability is complete without impact of govt regulations. See the section in demographia report about urban containment. (page 16 http://www.demographia.com/dhi.pdf). Fascinating discussion on urban containment policies and sudden increase in land values where containment starts.
I'm not sure I buy Demographia's analysis. Price-to-income is not a meaningful metric
Agreed. My reference was the impact of regulations on property/land prices esp. policies that encourage land banking by the state itself and it's impact on stamp duty revenue from elevated prices. Does this make supply inelastic?
Regarding the last part, the "symmetry" you're referring to implies a zero sum game.
But surely it cannot be a zero sum. Absorbtion rates notwithstanding, policies that reduce returns on housing will reduce supply of housing.
Or am I misunderstanding your argument?
After all the voluntary trades are made we are in a market equilibrium. An involuntary change from that point means a symmetrical cost on property owners for every benefit to non-owners
But voluntary trades continue to happen and increase supply (both in quantity and quality).
To the extent that a policy interferes with future voluntary trades this supply is reduced.
Am I wrong?
Thanks Cameron for this excellent article.
Many of the nations "renters" actually own a house or apartment elsewhere. For instance, most Federal politicians might be "renting" on Census night in Canberra, with juicy tax-free, taxpayer paid per diem accommodation allowances, and also own one to 17 houses elsewhere. Is there any good data on this group?
A side issue is that Members of the House of Reps have to declare the financial interests of their spouses, Senators apparently do not.