Economic modelling of housing reform

Housing affordability is a vexing issues for all levels of Australian government. The issues around housing affordability are complex on both the demand and supply side. Demand side issues range from taxation, changing social trends and foreign investment in Australia. On the supply side, a myriad of concerns have been raised around the rate of land release, redevelopment options and developer charges.

Social factors are also at play, including housing affordability for first home buyers and issues around homelessness.

When we consider that many of these issues cut across different levels of government, complexity only increases.

The bottom line is that there are a number of potential options are being considered in addressing housing affordability. For example, the Victorian government recently announced a range of measures under the Homes for Victorians package designed to address housing security and affordability, including changes to stamp duties and the First Home Owner Grant.

Assessing the economic impacts of changes in housing policy requires expertise both in the specifics of housing markets and rigorous economic analysis. To this end, Cadence Economics combined our CGE modelling capabilities with the housing experience of SGS Economics and Planning as part of our recently announced capability parnership. to undertake economic modelling of a wide range of policy options considered by the Victorian Government.

Many of the initiatives have a particular regional focus, including doubling the First Home Owner Grant in regional areas. Our capabilities in providing customised regional aggregations of our CGE model was a perfect fit, allowing for bespoke and accurate alignment with the planning areas under consideration.

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