Australia’s skyrocketing house prices are destabilising the national economy
Australia’s skyrocketing house prices are making the national economy less stable and decreasing productivity, new research has warned.
The study from UNSW found home ownership is now out of reach for anyone under the age of 35.
Professor of Housing Research and Policy at UNSW, Hal Pawson, says Australians put “an enormous amount of resources into housing because compared to other countries it’s more expensive than it should be”.
“We’re sinking a tremendous amount of debt into housing, that’s money we could be spending on other things and some of those other things create a lot more employment than housing does,” he told Ross and Russel.
Professor Pawson says falling interest rates over the past two decades, alongside economic polices such as economic gearing, which encourage housing investment, have fuelled the national economic destabilisation.
“We have a system … that encourages what really economically is an unhealthy scale of housing investment,” he said.
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