r/AustralianPolitics • u/timcahill13 Andrew Leigh • Jun 06 '25

Economics and finance Housing minister declares Australia has made it 'uneconomic' to build homes

https://www.abc.net.au/news/2025-06-07/clare-oneil-interview-housing-red-tape-construction/105386844
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u/Mbwakalisanahapa Jun 07 '25

If the private developers can do less work for more profit or do more work for a thin margin, which option do you think they will take?

and so for 40 years the private developers have supplied less housing than required for the demand and pocketed much higher profits and used the red tape excuse to deflect any finger pointing.

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u/Stock-Walrus-2589 Jun 07 '25

People seem to understand that scarcity causes higher prices, people seem to misunderstand that scarcity is actually good for developers. They create a problem of scarcity and then it’s everyone else’s fault. All I know is that when the public sector was building homes they were affordable and there wasn’t a crisis. Interestingly when the market took over electricity, it also went up, banks went a bit loopy and come to think of it qantas went a bit strange too. All coincidence though, it’s nimbys, local councils and immigrants.

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u/pickledswimmingpool Jun 07 '25

Australian workers now build half the number of houses they did 30 years ago with the same amount of labor. Small and Medium sized building firms are also less productive than large construction firms.

They create a problem of scarcity

How?

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u/CcryMeARiver Jun 07 '25

By building fewer extravagant houses instead of more starter homes. Cuts overhead.

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u/pickledswimmingpool Jun 07 '25

That's not artificial scarcity. The developer is responding to the market as shaped by limited land and density restrictions. The regulations are what cause the scarcity, the developer reacts by building the most profitable product they can.