Housing costs and home ownership in Australia - what is the main reason?

Comments on Robert Gottliebsen “End of the Australian dream”, 4/11/2009, http://www.businessspectator.com.au//bs.nsf/Article/house-prices-RBA-interest-rates-hike-pd20091104-XFQY5?OpenDocument

While there is some truth to the story that the housing price may go up as both the costs of construction and the number of investors may rise, it is a far too one-sided story.

Any builders cannot expect that the interest rate will stay as low as they are now. So the rise of interest rate may increase construction costs, builders should be able to absorb higher interest costs.

The argument by some builders or their representatives are nothing less than a self-interested lobby by a special interest group.

Further, how much of the high prices or costs of housing are due to interest costs in construction in Australia?

Why don't builders put pressure on government, both federal and state to lower the costs of their planning and administration that seem to be one of the main reason of higher housing price and short supply in Australia?

Any knee-jerking reaction by the federal government on the interest cost deductibility is short-sighted. That is policy on the run. It may have an effect to dampen price of housing, but will increase the rentals for many renters.

Government has to treat investment in a fair and equal manner in terms of cost deductibility and taxation. It is a wider issue than just the interest cost deductibility for investors in housing properties.