POLICY / HOUSING SUPPLY

The Zoning Straitjacket

Demand-side subsidies like First Home Owner Grants simply inflate prices. The structural crisis lies in municipal zoning and construction bottlenecks.

Australia is attempting to fit an immigration intake of 500,000+ per year into cities where local councils actively block medium-density infill development. The result is artificial land scarcity in the middle-ring suburbs of Sydney and Melbourne.

The Planning Tax

The Reserve Bank of Australia has calculated that zoning restrictions act as a 'planning tax', inflating the cost of a Sydney house by over $400,000 above its fundamental cost of production.

The Supply Deficit Accumulator

Model the accumulating structural deficit of dwellings based on current population growth vs construction completion rates.

New Households Required (Annual) Actual Completions (Annual) Current Accumulated Shortfall

Shortfall in Years

Dwellings short. This guarantees price escalation regardless of interest rates.

Interactive Tool Requires JavaScript

This calculator requires JavaScript to function. Below is the underlying formula so you can perform the calculation manually:

Future Deficit = Current Deficit + (Annual Demand - Annual Completions) × Years

Demonstrates how minor annual shortfalls compound into generational housing crises.

Frequently Asked Questions

Should we ban negative gearing?: While negative gearing heavily distorts capital allocation, abolishing it without simultaneously liberalizing zoning laws will not meaningfully increase the physical supply of dwellings.