Report suggests affordability improvements

It says the government needs to restructure financial incentives for local councils, shift the burden of water infrastructure costs, and create competition in planning if it wants to deliver affordable homes.

"There is a common misconception out there that the housing affordability crisis is a result of market failure," said executive director Dr Oliver Hartwich. "In actual fact, it is poor policy which has fostered an anti-development sentiment among local councils.

"For too long, local government has been left to carry the infrastructure costs that come with new housing developments, without a means of sharing in the economic benefits new residents bring. Under this framework it is entirely rational for councils to discourage new home construction, but it has serious consequences for the supply of affordable homes."

He said that was clear in the data that showed the median house would take 5.1 times the median income to pay off, compared to an international benchmark of 3.0.