Products – The Centre for Independent Studies

Planning restrictions harm housing affordability

Peter Tulip
03 December 2020 | PP33
Planning restrictions harm housing affordability

Planning restrictions reduce the supply of housing and hence raise its price.  This paper summarises recent research on this topic, focussing on Australia’s largest cities.

The severity of planning regulations can be gauged by the difference between sale prices and the costs of supply.  This wedge represents what people would pay for the legal right to provide extra dwellings at a location. The wedge, and hence prices, are high because these rights are unnecessarily scarce.

For detached houses, costs comprise the dwelling structure and the land that other home-owners need to forego. Planning restrictions are estimated to raise house prices 73 per cent above these costs in Sydney, 69 per cent in Melbourne, 42 per cent in Brisbane and 54 per cent in Perth.

Extra apartments can be supplied by raising the height of new buildings.  This increases construction costs but means that extra land does not need to be used.  Restrictions are estimated to raise the price of the average new apartment by 68 per cent above costs in Sydney, 20 per cent in Melbourne and 2 per cent in Brisbane.

These estimates are in line with a large body of international research which has been thoroughly vetted.

Latest Publications

Resisting China’s Economic Coercion: Why America should support Australia
Alan Dupont
08 April 2021 | PP38

China’s unprecedented trade campaign against Australia is a case study in economic coercion for geopolitical purposes. Its aim is twofold: to bend Canberra to Beijing’s will and to decouple it from the US alliance system. Australia has withstood such pressure to date, but needs American support. This paper argues that the Biden Administration should lead in helping Australia and other…

READ MORE
Australians’ Attitudes to Social Media: Connection or Curse?
Monica Wilkie
29 March 2021 | PP37

Social media appears in the news cycle, almost daily, and the majority of the coverage is negative. Politicians from all sides, and bureaucratic agencies have been warning about the apparent danger social media pose to journalism, democracy, business, and civil society. But Australians are far more optimistic about social media than the alarmist narrative. The CIS commissioned YouGov to poll…

READ MORE
The Need for U.S.-Australia Leadership to Counter China across the Indo-Pacific
Erik M. Jacobs
25 March 2021 | PP36

China’s recent actions – its trade coercion against Australia, border clash with India, maritime harassment of Japan, and military expansionism in the South China Sea – have compelled the U.S. and Australia to leverage their decades-long defence alliance and intelligence ties to deepen existing relationships and build new partnerships in the face of an aggressive China bent on asserting itself…

READ MORE
The Looming Iceberg: Australia’s post-pandemic debt risk
Robert Carling
28 January 2021 | PP35

After many years with low public debt, Australia is seeing a much higher debt burden as a result of the coronavirus pandemic. In the years ahead, according to recent budget estimates, it will reach close to $2 trillion in aggregate at the Commonwealth and state/territory levels of government. This poses a risk to economic growth in the longer term and…

READ MORE
Worlds Apart: Remote Indigenous disadvantage in the context of wider Australia
Jacinta Nampijinpa Price
25 January 2021 | PP34

Remote and very remote Indigenous communities have become victims of a ‘wicked problem’. A combination of high impact factors that, when pooled together, are having devastating effects on communities. Education and employment rates in remote and very remote Indigenous communities put them on par with countries such Afghanistan, a nation devastated by over 19 years of war. Poor health outcomes…

READ MORE