Partly correct....

If you access the ABS web-site and download the house price index for each state and capital and map out long term growth excluding the years after 2000. Then calculate the growth of housing that has been typically matching inflation or 3.3% per year (depending on state).

Then you over-lay immigration, births, deaths, and interest rates. You will find that that most of them don't really correlate with the boom in house prices.

Even accounting for the Negative gearing introduction it didn't have `that` much of a impact.

The only correlation I have found that triggered the whole entire cluster f we have now. Is if you go back and look at the introduction of Capital Gains Tax Discount.

After the introduction of CGT Discount that is when the vast majority of high to middle income earners turned to housing as a investment stream to avoid tax. Then on-top of this you had the Howard Government introducing the `User Pay` system where instead of the tax payer fitting the bill for new suburbs and infrastructure for housing, the developer and home owner now has to pay for housing infrastructure.

I live in Darwin, and did recently purchase a house.

Yes good :) that's the kind of data driven analysis we should build on.

Additionally, we have to explain why house price rises correlated strongly across particular international areas at particular times (and that's one area where international investment should not be struck off the initially unfeasible list of options until our data/theory suggests otherwise).

And additionally, if house prices are increasing, why these cities/areas and not others. If there is a reason money and investment is flowing to these places, do these policies address those fundamental reasons. If not, policies may just have to watch effects flow around policy like water flows around obstructions.

The "supply argument", and I start by admitting I cannot do this debate justice in the space of a HN comment, reminds me of the futurama joke: "you are technically correct, the best kind of correct".

If budgets/demand increases, and supply does not adjust, then prices rise. It's Econ 101, and it's technically true. But like most technically true answers, there something unsatisfyingly unhelpful about it.

Tokyo is likely strange due to the particular timing and history of housing and economic bubbles in Japan, vis a vis the millenium bubble and post gfc story that's been playing out for most English speaking nations.

From a later year Economics point of view though, we can start asking some bigger questions:

-what factors contribute to increased demand -should supply increase to match demand? -could any market have increased supply sufficiently to avoid price increases in any meaningful way given the relative liquidity and elasticity of funds and demand increasing policies vs the structural inelastic nature of housing supply - are lagged over/under supply problems possible? - from a public policy and prudential perspective, what should we be doing to manage these issues? should policy be set by locals or by money flows (and I don't think there's an easy or universal answer to that last one)