Luci Ellis, the Reserve Bank of Australia (RBA)’s head of financial stability says that building housing on city fringes may be counter-productive to solving Australia’s supply shortage, since most people want to live near the city.
Says Ellis:
- Population growth was coming mainly from international students (tertiary education is one of Australia’s biggest exports after coal and iron ore)
- “It’s little appreciated just how concentrated that population growth has become in students and former students … Where do students want to live? Well it’s not big family homes on the fringe, it’s apartments in the inner areas near the universities.
It’s all very well to build more housing to accommodate the population but it has to be broadly comparable with where people want to live. Building housing where people don’t want to live is counterproductive.” - The consequence of this demand is that the cost of living closer to the city has increased, more so than in the past,
- Building new cities could be a solution
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I have a view on what she says … but …
Well, I don’t know what capacity she was speaking in, maybe its just a personal view, but I think if the RBA is forming views on where new housing should be built they are well overstepping their mandates (price stability and employment … and financial stability).
