Stephen Kirchner from Australia: Improving housing affordability begins at home

Australia's capital house prices rose 10% last financial year, with an even stronger rise of 15% in Sydney. While seemingly a dramatic increase, it is important to look through the short-run variability in house prices to longer-run trends.

On an inflation and quality-adjusted basis, house prices in Australia have increased by around 2-3% per annum since 1970. This is enough to yield a doubling in real house prices every 30 years or so, underpinning a long-term decline in housing affordability and the homeownership rate.