Peter Tulip

A common finding is that the effect is huge.

So in terms of house prices, we estimate that land use restrictions increase the cost of housing by about 73%.

And then that's for Sydney, it's a bit less in the other big cities.

And then for apartments, cost of buying an apartment by 68%.

So that's true.

It's actually because the restrictions haven't changed that's the problem.

That we have steadily increasing demand, you know, higher incomes, higher population, lower interest rates, but supply is not adjusting to meet that extra demand.

where it's as though we've frozen the structure of our cities in place the way it was in our parents' or grandparents' day.

So we've still got a fixed supply interacting with growing demand, and that results in higher prices.

If it was in a well-functioning market, you'd have an increase in quantity.

We'd be building more houses.

But our zoning restrictions make it very difficult to do that, and so we get this affordability problem instead.

Yes, so it's being chaired by Jason Filinski, one of the local Sydney politicians.

They're examining a range of issues.

Our sense is that the key problem with housing affordability is, as I say, planning restrictions.

We need to be building more housing, and that means we need to get the planning restrictions that prevent that out of the way to allow apartment buildings to go up and to allow detached houses to be converted into medium and high density.

Unfortunately, those restrictions are largely the responsibility of state governments, or in some states, local governments.

And the federal government, which is running this inquiry, doesn't have direct responsibility.

Partly we're just hoping that the current inquiry will put a spotlight on the issue to explain the dimensions of the problem and the need for change.

We also think the federal government should be channeling more money into easing planning restrictions.