Houston, we have a housing problem
Adding up everything we own, the Government Statistician reckons Australian families are worth $5800 billion. That's more than five times as much as the nation's annual income.
Houses comprise two thirds of households' measured wealth.
Real estate experts RP Data put the value of the average house in Melbourne at $500,000.
But in Houston, Texas, a metropolis at least as bustling with an economy at least as strong as Melbourne, the average house is bigger yet worth only $215,000.
How can the average Melbourne house be worth twice that of Houston?
As they say, "There are damned lies and statistics".
Housing's statistical twist is mainly caused by government regulations over supply of land.
A major reason why Houston's house prices are less than half those in Melbourne is because land there is not rationed by development controls.
By contrast, all Australian governments strictly limit land availability for building new homes on the edge of cities.
The consequent land shortage brings a fifty-fold increase in the value of that land which gets government development approval.
Yet the land is unchanged and there's no intrinsic shortage of it. The higher value is caused only because the regulations limit supply.
And the regulatory-induced high prices on the city edge bring a knock-on effect for house prices throughout the city.
The planning control regulations at the heart of our high prices were originally a means of ensuring co-ordination between house construction and infrastructure like roads and schools.
Gradually, their goals have shifted to focus on stopping urban sprawl or redevelopments within the cities. And added to planning controls have been other cost-enhancing regulations over density, parkland, and so on.
Other Australian governments are worse than Victoria's in preventing land being used for housing. Even so, house prices throughout Melbourne are probably $80,000 higher than they would be without the rigid planning restrictions.
Those of us who own our home often look at its value and feel prosperous. But it is an artificial affluence brought at the expense of those without homes -- and many younger people see home ownership as an impossible dream.
Housing regulations are already featuring in the coming state election.
The Liberals say they will open up the urban growth boundary and slash the urban planning red tape.
This would be an excellent start but will prove difficult to achieve given the decades over which the red tape has been amassed. Worthy goals can easily be strangled in endless inquiries.
The ALP sees a much greater role for urban infill developments which are often resisted by neighbourhood groups who oppose inner city apartment building.
There is surely a role for both increased developments on the city edge and in suburbia.
Housing should allow buyers choice and neighbours cannot expect extended rights to control how other people use their property.
With both major parties focused on trying to reduce regulatory restraints to housing development, hopefully the coming election will mark a turning point in the long ascendancy enjoyed by those who seek greater controls and regulations.