More houses don’t seem to be affecting prices – at least not downwards
There has been recent argument by politicians that an increase in the number of dwellings will bring down prices. A “supply-side” solution doesn’t seem to be affecting things at this stage.
House Prices Still Rising
In NSW the last couple of years has provided an increased supply of housing and yet prices are still rising. Even in Western Australia where prices have been falling for the last 3 years and a decent level of new dwelling supply the market is not able to deliver properties for the lower end of the market. Affordable housing to those on low and moderate incomes is difficult due to the cost of building and a minimal quality standard. The cost of building consists of the land price, costs of the build and any profit for taking on the risk of development.
A detailed analysis on housing affordability, supply and solutions can be seen in an article found at http://www.abc.net.au/news/2017-03-07/housing-supply-australia-is-almost-a-world-leader-in-building/8331868