Understanding the housing policy levers of Commonwealth, state and territory, and local government

Recent commentary in the media has pointed out that the increase in housing affordability stress for lower income households is ‘being driven by a web of decisions being made by all three levels of government’. Just what are some of the major housing policy levers, controlled by Commonwealth; state and territory; and local governments?


In essence, the Commonwealth Government has responsibility for the policy levers impacting on housing demand; while state and territory, and local governments are mainly responsible for the policy levers impacting on housing supply.

Commonwealth government

Housing demand

The Commonwealth Government’s main impacts on housing demand, and therefore HAS, are through the taxation benefits given to investors (i.e. negative gearing and capital gains tax reductions) and population increase (or reduction) through migration policy (whether that policy is explicit or implicit).

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Source: AHURI