Housing is flat-out unaffordable. Politicians love talking about “affordable housing,” but can we actually achieve it without house prices dropping? No, not a chance.

Instead, politicians dodge this reality by claiming that simply building more homes will solve the problem. Will it? No. Why would developers willingly lower their prices?

Acquisition of the land drives residential development costs. It accounts for some 80% of an Australian home’s total price, and builders are obviously unable to discount this market reality.

However, replacing existing taxes with a universal land tax holding charge for all property owners—not just investors—would radically shift the market.

We avoid this solution simply because it works. It would trigger a sharp decline in land values and make housing genuinely affordable.

Failing political intervention, the real estate bubble will crash again on its usual nine- and eighteen-year schedules. Occasionally, these standard recessions deepen into full economic depressions, as discovered by Nikolai Kondratieff.

It should go without saying that generating a financial depression is a terrible way to achieve affordable housing.