Matthew Bowes
@mbowes.bsky.social
(He/him) Posting about public policy, housing and economics. Associate at the Grattan Institute.
https://grattan.edu.au/expert/matthew-bowes/
https://grattan.edu.au/expert/matthew-bowes/
But Australia’s housing affordability problems are decades in the making. Governments can’t afford to wait any longer to implement evidence-backed reforms that allow for more homes where Australians want to live. 12/
November 11, 2025 at 8:32 PM
But Australia’s housing affordability problems are decades in the making. Governments can’t afford to wait any longer to implement evidence-backed reforms that allow for more homes where Australians want to live. 12/
I’ve appreciated much of the commentary we’ve received about our work, over the past 6 months and since it was released last week. Despite many differences of opinion, it’s great that a wide range of policy experts care deeply about making housing more affordable. 11/
November 11, 2025 at 8:32 PM
I’ve appreciated much of the commentary we’ve received about our work, over the past 6 months and since it was released last week. Despite many differences of opinion, it’s great that a wide range of policy experts care deeply about making housing more affordable. 11/
These changes may sound small, but the impacts build up quickly, as this great Inflection Points chart shows. Following major planning reforms in Auckland in 2016, house prices grew slower than inflation, whereas they're up 30 per cent in real terms across the rest of NZ. 10/
November 11, 2025 at 8:31 PM
These changes may sound small, but the impacts build up quickly, as this great Inflection Points chart shows. Following major planning reforms in Auckland in 2016, house prices grew slower than inflation, whereas they're up 30 per cent in real terms across the rest of NZ. 10/
The modelling in our report does not suggest that reforms will reduce house prices by $100k tomorrow. Instead, our work shows that expanding supply each year can reduce prices over time, leaving them 7% lower than otherwise within 5 years, or 12% lower within 10 years. 9/
November 11, 2025 at 8:31 PM
The modelling in our report does not suggest that reforms will reduce house prices by $100k tomorrow. Instead, our work shows that expanding supply each year can reduce prices over time, leaving them 7% lower than otherwise within 5 years, or 12% lower within 10 years. 9/
So yes, upzoning can increase housing supply even as prices fall. But timeframes also matter here. Housing supply, prices, and incomes are growing all the time. It’s the cumulative changes to these factors over time that matter to Australians. 8/
November 11, 2025 at 8:31 PM
So yes, upzoning can increase housing supply even as prices fall. But timeframes also matter here. Housing supply, prices, and incomes are growing all the time. It’s the cumulative changes to these factors over time that matter to Australians. 8/
Second, allowing more homes per site reduces land costs per dwelling, because costs are now split across more homes. Together, these factors mean upzoning can expand the range of housing projects that can be profitably built even as prices fall or stagnate. 7/
November 11, 2025 at 8:31 PM
Second, allowing more homes per site reduces land costs per dwelling, because costs are now split across more homes. Together, these factors mean upzoning can expand the range of housing projects that can be profitably built even as prices fall or stagnate. 7/
This happens in two ways. First, land costs for infill sites can fall when planning rules are made more permissible, because the supply of land where new housing is permitted increases, creating a more competitive market for developable land. 6/
November 11, 2025 at 8:31 PM
This happens in two ways. First, land costs for infill sites can fall when planning rules are made more permissible, because the supply of land where new housing is permitted increases, creating a more competitive market for developable land. 6/
Successful upzoning does lead to a long-lasting boost to supply, because it changes both sides of the profit equation. Specifically, upzoning reduces land costs per home, which are a key factor in development costs for infill housing. 5/
November 11, 2025 at 8:31 PM
Successful upzoning does lead to a long-lasting boost to supply, because it changes both sides of the profit equation. Specifically, upzoning reduces land costs per home, which are a key factor in development costs for infill housing. 5/
We model these development costs in detail in the report, as part of our analysis showing that recent NSW and Victorian planning reforms do create substantial ‘commercially feasible’ – i.e. profitable to build – housing capacity. 4/
November 11, 2025 at 8:31 PM
We model these development costs in detail in the report, as part of our analysis showing that recent NSW and Victorian planning reforms do create substantial ‘commercially feasible’ – i.e. profitable to build – housing capacity. 4/
Ultimately, the reason upzoning increases private housing supply is because it increases the places where housing is profitable to build, i.e. accounting for both the cost of development and housing prices. If no new profitable opportunities are created, supply won't change. 3/
November 11, 2025 at 8:31 PM
Ultimately, the reason upzoning increases private housing supply is because it increases the places where housing is profitable to build, i.e. accounting for both the cost of development and housing prices. If no new profitable opportunities are created, supply won't change. 3/
Focusing solely on the price reduction runs the risk of 'reasoning from a price change'. As the headline above suggests, the logic is circular: more homes means lower prices, which means fewer homes? Clearly something's missing here. 2/
November 11, 2025 at 8:31 PM
Focusing solely on the price reduction runs the risk of 'reasoning from a price change'. As the headline above suggests, the logic is circular: more homes means lower prices, which means fewer homes? Clearly something's missing here. 2/
First, some context on the figure Gurran is talking about. In our report, we estimate that allowing more homes in our cities as we recommend – if adopted Australia-wide – could lead to 67k new homes per year and hence reduce the median house price by $100k within 10 years. 1/
November 11, 2025 at 8:31 PM
First, some context on the figure Gurran is talking about. In our report, we estimate that allowing more homes in our cities as we recommend – if adopted Australia-wide – could lead to 67k new homes per year and hence reduce the median house price by $100k within 10 years. 1/
Australia's cities have a lot to love. But a shortage of housing is pushing far too many out of the suburbs they want to live in, or out of our cities altogether. If we want to build the world's best cities, that has to change. 13/
November 5, 2025 at 8:02 PM
Australia's cities have a lot to love. But a shortage of housing is pushing far too many out of the suburbs they want to live in, or out of our cities altogether. If we want to build the world's best cities, that has to change. 13/
By helping to ease Australia's housing shortage, these reforms would also push down housing costs, as occurred in Auckland following reforms to their planning rules in 2016. 12/
November 5, 2025 at 8:02 PM
By helping to ease Australia's housing shortage, these reforms would also push down housing costs, as occurred in Auckland following reforms to their planning rules in 2016. 12/
Our recommended reforms would boost Australians incomes by increasing productivity, create better-functioning labour markets by allowing people to live and work where they want, and reduce car use and hence carbon emissions. 11/
November 5, 2025 at 8:02 PM
Our recommended reforms would boost Australians incomes by increasing productivity, create better-functioning labour markets by allowing people to live and work where they want, and reduce car use and hence carbon emissions. 11/
In Sydney we estimate that allowing multi-unit housing and flats up to 3 storeys on land currently zoned for low density would create capacity for more than 1 million 'commercially feasible' homes - homes that are profitable to build given current development costs. 10/
November 5, 2025 at 8:02 PM
In Sydney we estimate that allowing multi-unit housing and flats up to 3 storeys on land currently zoned for low density would create capacity for more than 1 million 'commercially feasible' homes - homes that are profitable to build given current development costs. 10/
Thankfully, the politics of housing in our cities are changing. NSW and Victoria have introduced major reforms that we analyse in-depth in the report, and which I'll look to explore further in a future post. But clearly, there's still further to go. 9/
November 5, 2025 at 8:02 PM
Thankfully, the politics of housing in our cities are changing. NSW and Victoria have introduced major reforms that we analyse in-depth in the report, and which I'll look to explore further in a future post. But clearly, there's still further to go. 9/
States should also review local heritage controls, and improve certainty in planning approval processes by providing deemed-to-comply pathways for mid- to high-density projects, and allowing low-density projects to avoid discretionary planning approval processes altogether. 8/
November 5, 2025 at 8:02 PM
States should also review local heritage controls, and improve certainty in planning approval processes by providing deemed-to-comply pathways for mid- to high-density projects, and allowing low-density projects to avoid discretionary planning approval processes altogether. 8/
Australian cities need to build more homes in the places people most want to live. That's why states should introduce reforms to permit 3-storey townhouses or flats on all residential land in capital cities, and at least 6 storeys near to transport hubs and commercial centres. 7/
November 5, 2025 at 8:02 PM
Australian cities need to build more homes in the places people most want to live. That's why states should introduce reforms to permit 3-storey townhouses or flats on all residential land in capital cities, and at least 6 storeys near to transport hubs and commercial centres. 7/
This is compounded by local heritage controls - such as heritage conservation areas in Sydney or heritage overlays in Melbourne - that apply to 21% of residential land within 10km of the CBD in Sydney and 29% in Melbourne. 6/
November 5, 2025 at 8:02 PM
This is compounded by local heritage controls - such as heritage conservation areas in Sydney or heritage overlays in Melbourne - that apply to 21% of residential land within 10km of the CBD in Sydney and 29% in Melbourne. 6/