Professor Philip Lane:

I will answer the Senator's question and then address the issue of overheating. There is only one answer to the affordability crisis, namely, to further increase supply of affordable housing. That depends partly on the market delivering and partly on the choices made by the political system. There are many choices to be made. As I noted in my opening statement, there has been an increase in supply this year and last year and there will be a greater increase next year. However, these increases are not sufficient to address the significant mismatch between the numbers of people seeking a home and the scale of what can be delivered. As I consistently state, there is a material risk of a reversal in house prices.