IDEAS home Printed from https://ideas.repec.org/p/osf/osfxxx/8f67h.html
   My bibliography  Save this paper

When homes earn more than jobs: the rentierization of the Australian housing market

Author

Listed:
  • Murray, Cameron

    (The University of Sydney)

  • Ryan-Collins, Josh

Abstract

This article develops the concept of housing market ‘rentierization’ to describe the shift in the treatment of housing away from its use as a consumption good to an asset from which economic rent can be extracted, with Australia as a canonical example. Rentierization encompasses, but goes beyond, the financialisation of housing that has been the focus of attention in recent political economy literature as it involves policy changes and coordination across the land and housing market, fiscal-policy as well as financial policy spheres. In addition, we argue, rentierization offers a better explanation of rising house prices than the decline in real interest rates which has come to the fore in the recent economics literature. Our study of Australia examines the returns to land and housing over time and traces the roots of rentierization to developments that preceded the financial liberalisation of the 1980s, including the privatisation of public housing in the 1960s and 70s. We consider some of the reasons for the resilience of Australia’s rentier-oriented housing model, and policy alternatives which might help reduce the logic of rentierization and, in doing so, reduce housing-related inequalities.

Suggested Citation

  • Murray, Cameron & Ryan-Collins, Josh, 2020. "When homes earn more than jobs: the rentierization of the Australian housing market," OSF Preprints 8f67h, Center for Open Science.
  • Handle: RePEc:osf:osfxxx:8f67h
    DOI: 10.31219/osf.io/8f67h
    as

    Download full text from publisher

    File URL: https://osf.io/download/5f9bea2fb1ea170423c957fd/
    Download Restriction: no

    File URL: https://libkey.io/10.31219/osf.io/8f67h?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. David M. Williams, 2009. "House prices and financial liberalisation in Australia," Economics Series Working Papers 432, University of Oxford, Department of Economics.
    2. Òscar Jordà & Katharina Knoll & Dmitry Kuvshinov & Moritz Schularick & Alan M Taylor, 2019. "The Rate of Return on Everything, 1870–2015," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(3), pages 1225-1298.
    3. Ryan-Collins, Josh & Lloyd, Toby & Macfarlane, Laurie, 2017. "Rethinking the Economics of Land and Housing," University of Chicago Press Economics Books, University of Chicago Press, number 9781786991195, Febrero.
    4. Edward Glaeser & Joseph Gyourko, 2018. "The Economic Implications of Housing Supply," Journal of Economic Perspectives, American Economic Association, vol. 32(1), pages 3-30, Winter.
    5. Kelly, Robert & McCann, Fergal & O’Toole, Conor, 2018. "Credit conditions, macroprudential policy and house prices," Journal of Housing Economics, Elsevier, vol. 41(C), pages 153-167.
    6. repec:bla:ecorec:v:51:y:1975:i:134:p:203-17 is not listed on IDEAS
    7. Hal Pawson & Vivienne Milligan & Chris Martin, 2019. "Building Australia's affordable housing industry: capacity challenges and capacity-enhancing strategies," International Journal of Housing Policy, Taylor & Francis Journals, vol. 19(1), pages 46-68, January.
    8. Jordà, Òscar & Schularick, Moritz & Taylor, Alan M., 2015. "Betting the house," Journal of International Economics, Elsevier, vol. 96(S1), pages 2-18.
    9. Mariano Kulish & Anthony Richards & Christian Gillitzer, 2012. "Urban Structure and Housing Prices: Some Evidence from Australian Cities," The Economic Record, The Economic Society of Australia, vol. 88(282), pages 303-322, September.
    10. repec:ces:ifodic:v:15:y:2017:i:1:p:19307486 is not listed on IDEAS
    11. Christopher Kent & Guy Debelle, 1999. "Trends in the Australian Banking System: Implications for Financial System Stability and Monetary Policy," RBA Research Discussion Papers rdp1999-05, Reserve Bank of Australia.
    12. Michael Hudson, 2010. "The Transition from Industrial Capitalism to a Financialized Bubble Economy," Economics Working Paper Archive wp_627, Levy Economics Institute.
    13. Trent Saunders & Peter Tulip, 2019. "A Model of the Australian Housing Market," RBA Research Discussion Papers rdp2019-01, Reserve Bank of Australia.
    14. Keith Jacobs, 2015. "The 'Politics' of Australian Housing: The Role of Lobbyists and Their Influence in Shaping Policy," Housing Studies, Taylor & Francis Journals, vol. 30(5), pages 694-710, July.
    15. Gavin A. Wood, 1990. "Housing Finance and Subsidy Systems in Australia," Urban Studies, Urban Studies Journal Limited, vol. 27(6), pages 847-876, December.
    16. Ross Kendall & Peter Tulip, 2018. "The Effect of Zoning on Housing Prices," RBA Research Discussion Papers rdp2018-03, Reserve Bank of Australia.
    17. Stephan Kohns, 2017. "Monetary Policy and Financial Stability," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(1), pages 17-18, 04.
    18. Murray, Cameron, 2019. "The Australian housing supply myth," OSF Preprints r925z, Center for Open Science.
    19. Fiona Price & Benjamin Beckers & Gianni La Cava, 2019. "The Effect of Mortgage Debt on Consumer Spending: Evidence from Household-level Data," RBA Research Discussion Papers rdp2019-06, Reserve Bank of Australia.
    20. Charles Goodhart & Boris Hofmann, 2008. "House prices, money, credit, and the macroeconomy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 24(1), pages 180-205, spring.
    21. John Muellbauer, 2018. "Housing, Debt and the Economy: A Tale of Two Countries," National Institute Economic Review, National Institute of Economic and Social Research, vol. 245(1), pages 20-33, August.
    22. Stephan Kohns, 2017. "Monetary Policy and Financial Stability," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(01), pages 17-18, April.
    23. Adam Stebbing & Ben Spies-Butcher, 2016. "The decline of a homeowning society? Asset-based welfare, retirement and intergenerational equity in Australia," Housing Studies, Taylor & Francis Journals, vol. 31(2), pages 190-207, March.
    24. Judith Yates, 1983. "Access To Housing Finance And The Campbell Report: The Implications Of Implementing The Recommendations Of Chapter 37," Economic Papers, The Economic Society of Australia, vol. 2(S1), pages 101-122, April.
    25. R. Silberberg, 1975. "Rates of Return on Melbourne Land Investment, 1880–92," The Economic Record, The Economic Society of Australia, vol. 51(2), pages 203-217, June.
    26. James E Mcnulty, 2009. "The Long-run Demand for Housing, the Housing Glut, and the Implications for the Financial Crisis," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 44(4), pages 206-215, October.
    27. Nicole Gurran & Peter Phibbs, 2015. "Are Governments Really Interested in Fixing the Housing Problem? Policy Capture and Busy Work in Australia," Housing Studies, Taylor & Francis Journals, vol. 30(5), pages 711-729, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Josh Ryan‐Collins, 2021. "Private Landed Property and Finance: A Checkered History," American Journal of Economics and Sociology, Wiley Blackwell, vol. 80(2), pages 465-502, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Josh Ryan-Collins, 2021. "Breaking the housing–finance cycle: Macroeconomic policy reforms for more affordable homes," Environment and Planning A, , vol. 53(3), pages 480-502, May.
    2. Schüler, Yves S. & Hiebert, Paul P. & Peltonen, Tuomas A., 2020. "Financial cycles: Characterisation and real-time measurement," Journal of International Money and Finance, Elsevier, vol. 100(C).
    3. Berger, Tino & Richter, Julia & Wong, Benjamin, 2022. "A unified approach for jointly estimating the business and financial cycle, and the role of financial factors," Journal of Economic Dynamics and Control, Elsevier, vol. 136(C).
    4. Murray, Cameron K., 2020. "Time is money: How landbanking constrains housing supply," Journal of Housing Economics, Elsevier, vol. 49(C).
    5. repec:spo:wpmain:info:hdl:2441/74362fq3f99s299n07e84dlcib is not listed on IDEAS
    6. Jordà, Òscar & Schularick, Moritz & Taylor, Alan M., 2020. "The effects of quasi-random monetary experiments," Journal of Monetary Economics, Elsevier, vol. 112(C), pages 22-40.
    7. Bruno Albuquerque, 2019. "One Size Fits All? Monetary Policy and Asymmetric Household Debt Cycles in U.S. States," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 51(5), pages 1309-1353, August.
    8. Peter Phibbs & Nicole Gurran, 2021. "The role and significance of planning in the determination of house prices in Australia: Recent policy debates," Environment and Planning A, , vol. 53(3), pages 457-479, May.
    9. Cameron K. Murray, 2022. "A Housing Supply Absorption Rate Equation," The Journal of Real Estate Finance and Economics, Springer, vol. 64(2), pages 228-246, February.
    10. Blot, Christophe & Hubert, Paul & Labondance, Fabien, 2024. "The asymmetric effects of monetary policy on stock price bubbles," European Economic Review, Elsevier, vol. 168(C).
    11. Murray, Cameron, 2019. "The Australian housing supply myth," OSF Preprints r925z, Center for Open Science.
    12. repec:hal:spmain:info:hdl:2441/74362fq3f99s299n07e84dlcib is not listed on IDEAS
    13. Murray, Cameron, 2020. "A housing supply absorption rate equation," OSF Preprints 7n8rj, Center for Open Science.
    14. Berger, Tino & Richter, Julia & Wong, Benjamin, 2022. "A unified approach for jointly estimating the business and financial cycle, and the role of financial factors," Journal of Economic Dynamics and Control, Elsevier, vol. 136(C).
    15. Stijn Claessens & M Ayhan Kose, 2018. "Frontiers of macrofinancial linkages," BIS Papers, Bank for International Settlements, number 95.
    16. Josh Ryan‐Collins, 2021. "Private Landed Property and Finance: A Checkered History," American Journal of Economics and Sociology, Wiley Blackwell, vol. 80(2), pages 465-502, March.
    17. Kirchner, Stephen, 2018. "Money too tight to mention: The Reserve Bank of Australia’s financial stability mandate and low inflation," Economic Analysis and Policy, Elsevier, vol. 60(C), pages 141-149.
    18. Kapoor, Supriya & Peia, Oana, 2021. "The impact of quantitative easing on liquidity creation," Journal of Banking & Finance, Elsevier, vol. 122(C).
    19. Steffen Wetzstein, 2017. "The global urban housing affordability crisis," Urban Studies, Urban Studies Journal Limited, vol. 54(14), pages 3159-3177, November.
    20. Zsolt Darvas, 2018. "Forecast errors and monetary policy normalisation in the euro area," Policy Contributions 28816, Bruegel.
    21. Cerutti, Eugenio M. & Obstfeld, Maurice & Zhou, Haonan, 2021. "Covered interest parity deviations: Macrofinancial determinants," Journal of International Economics, Elsevier, vol. 130(C).
    22. Chung‐Hua Shen & Hsing‐Hua Hsu, 2022. "The determinants of Asian banking crises—Application of the panel threshold logit model," International Review of Finance, International Review of Finance Ltd., vol. 22(1), pages 248-277, March.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osf:osfxxx:8f67h. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: OSF (email available below). General contact details of provider: https://osf.io/preprints/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.