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land unaffordability

The housing market and the death of Australia

"This issue is not the cost of building nor dwelling sizes, but the economic and political conditions which are fuelling the bubble. Policies which promise to build low cost modest housing, or any policy which increases density will only drive prices higher and worsen the situation. By reducing dwelling size, the premium paid for land increases and land price increases. After all, the bulk of the cost is the land, as houses can still be built for under $200,000. The high land price due to flooding the market with credit and speculation, not the size of the houses built. So reject any policy about increasing density or providing smaller "more affordable homes". [...] In the current climate the only result of making dwellings smaller, is to make people take $600,000 loans for 2 bedroom units instead of three bedroom houses. The market will simply price the smaller properties at the same price as the larger ones they replaced."
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