More supply will not resolve Housing Affordability issues

More supply in the residential sector does not equate to lower prices, according to Catherine Cashmore from the Property Observer. Forecasts for major capital cities show that the housing boom is set to continue through 2015, but the pace will vary tremendously.

In Sydney, property supply is an issue due to stringent planning requirements and regulations. There is constant concern as to how this capital city will accommodate the share of investors, who comprise more than 50% of the market.

The solution for the affordability problem throughout all capital cities varies, and creating a stable residential sector should not depend on home values. According to the author, reforms should be made by restructuring tax laws coupled by management of supply.

Read more about this on the Property Observer website.