Building more apartments will not solve Australia's housing affordability crisis unless policymakers address rising house prices and investor activity, new research shows. Australia's housing affordability crisis is being driven less by a shortage of apartments than by systemwide price pressures originating in the market for freestanding homes, according to new research.
The study, published in Cities, challenges a key assumption underpinning current housing policy: that increasing apartment supply will substantially improve affordability.
Researchers analyzed housing data across Sydney, Melbourne, Brisbane, Perth and Adelaide over nearly three decades. They found price movements are led by the house market, affecting the whole system, including apartments—a process known as a spillover.
"House prices are driving the whole system," says study co-author Professor Chyi Lin Lee from UNSW's School of Built Environment. "When house prices move, they significantly affect units, but not the other way around."
A 'two-market' view of housing
