In the spirit of one of my favourite economists, Don Boudreaux from Cafe Hayek, I thought I might start writing letters to the editor to keep sharp. This letter is in response to The West Australian’s front page article, “Perth Housing Price Boost” (30/1)
Government to blame for high house prices
While REIWA might welcome higher median home price (“Perth house price boost”, 30/1), the Western Australian community should lament this development. It is a travesty that one of the most sparsely populated places in the world should have such high house prices. In Demographia’s recent survey of home prices, Australia housing was more expensive than Singapore, a country not even a tenth the size, and the only culprit to blame is government. Rather than letting the market set prices based on actual scarcity of land, politicians at every level of government have artificially restricted the supply of land and inflated the cost of building, driving the cost of homes sky-high and shutting the young and the poor out of the market. While politicians might have praised the egalitarianism of Australia not even a week ago, in reality they are responsible for creating a new landed gentry for the 21st century.
Nobel Prize winning economist Milton Friedman said once, “If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.” The same could be said about State and local governments and their mismanagement of land in WA. It’s time we ended their control of land in this state.