'Everyone claims to want affordable housing, but no one wants cheap housing'
By Joanna Tovia
Cameron Murray is the author of The Great Housing Hijack and an economist who specialises in property markets, environmental economics and corruption.
He describes himself as an independent thinker who believes economics could be drastically improved.
What did you want to be when you grew up?
In high school, being a pilot seemed like fun. I started a course in aerospace avionics, which I didn't complete because I saw that property investing was an easier way to make money.
What did you study at university?
I started engineering then got a Master of Economics. Years later I did a PhD in economics looking at political favouritism and grey corruption.
How did you become a housing commentator?
I had been investing in residential property during the 2000s boom, as well as studying property valuation and planning at university. It became clear that a lot of the media commentary wasn't connected with the core economic relationships I saw in the market.
I started blogging in 2008, and now have an online audience who trust my insights. Since 2019, I have been a researcher with the Halloran Research Trust at The University of Sydney looking at housing economics, in particular the supply of new dwellings.
This led me to make predictions about the property market. When the analysts were worried about a collapse in property prices during the initial COVID panic, I argued that prices were more likely to rise by 20% than fall by 20%.
Someone online commented: "Where did this guy get his economics degree - the back of a Cornflakes packet?".
What is The Great Housing Hijack about?
It makes sense of the politics and economics of housing.
It provides a coherent view of the economics of the housing market - what drives rents, prices, density, locational variation and the speed of new housing developments. It builds on these core insights to show that there is an inescapable economic symmetry at the heart of housing - that high prices and rents for a buyer or renter are the investment returns of the current owner.
This leads to some peculiar politics and incentives for interest groups in the debate about housing. I then look at cities and periods throughout history to see what has delivered better outcomes.
How can we create affordable housing without hurting other property owners?
The trick is to create a parallel housing market.
We do this for defence personnel with Defence Housing. We did it for returned soldiers. We do it with public housing.
Globally, there are effective parallel public housing schemes, like Singapore's Housing & Development Board (HDB), which took home ownership there from about 20% to nearly 90% in a few decades. I've proposed a program called HouseMate that borrows the best lessons on how to do this.
How do vested interests control Australia's property market?
It is not just Australia's property market, but almost all property markets.
Home ownership is about 66% in Australia and about 18% of households are also landlords. Politicians themselves at all levels are predominantly homeowners, with the typical Federal politician owning 2.5 homes on average. So, a lot of our debate about making homes cheaper is really not genuine - it's for appearances.
The same goes for landlords and property developers, who make money when prices are higher, not lower. These groups are able to twist a story about how, if left untouched by regulations on rents or planning controls on where different types of development can go, they will improve the housing market for renters.
How would you invest $5000?
I would pay down the mortgage. Since I am forced to invest elsewhere with superannuation, I really see a need to further invest in similar assets.
What's your favourite thing to spend money on?
Family holidays.
Finish this sentence. Money is good for...
creating options in life. But you still need to make tough choices and do some grunt work to make progress in whatever option you choose.
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