Is population capping the way to lower house prices?

April 10, 2011

Some of the nation’s most densely populated areas are already operating at over-capacity. In a recent submission to the to the government’s sustainable population strategy, property developers represented by Urban Taskforce Australia produced modelling which shows the impact on property prices and employment levels of capping the population at current levels.

The report stated that housing prices in Sydney alone would fall more than 18 percent over the next decade if the federal government adopted policies that cap population growth in the biggest capital cities.

Prime Minister Gillard has also expressed concerns about projected population growth in capital cities.

”I think if you talk to the people of western Sydney or western Melbourne or the Gold Coast growth corridor in Queensland, people would look at you and say, ‘Where will all these (extra) people go?” she said, adding that in the biggest cities, increasing population density makes life more difficult for ordinary families already struggling to live with traffic congestion and expensive housing.

However, with major cities continuing to provide growth in employment opportunities, is a population cap realistic?

In 2010, Ms Gillard distanced herself from remarks made by her predecessor, Kevin Rudd, who supported a ”big Australia” with a population of 35 million and instead promised a sustainable population policy.

The government has since suggested the idea of population growth in regional or remote parts of Australia instead of the capital cities, possibly based on a two-tier approach to solve  problems associated with housing pricing and population.

Related mortgage links

• Best Mortgage
• Compare Home Loans
• Variable Rate Home Loans
• Buying A Home At Auction
• Home owners fix rates amid rate rise speculation
• Commonwealth Bank’s fee-free but not the cheapest mortgage

Compare home loans in Australia