Another Aussie here. Sure we have lots of land, but no water. Our limiting factor is potable freshwater. Our major rivers are dying, rainfall is becoming less predictable. Right now politicians are pushing to build more dams to fix the problem (for agriculture, not population) but that's only going to lead to more negative environmental impact.
Here in Australia we need more water recycling. It's energy intensive.
Australian land may technically be ample, but Australia has enormous problems incentivizing living in rural areas, to the point of granting work visas to unskilled laborers that can be renewed long enough to achieve permanent residency (Working Holiday Visa). The only requirement is youth.
Australia's urban population: 90%; Sydney & Melbourne metros: 40%
Much like California, the bulk of Australian economic opportunity centers around the major metros.
Your comments about banking and tax law are a non-sequitor. The same banking and tax laws apply in the entire country, but the expensive real estate is largely limited to the major metros. Australians would live in pleasant coastal towns such as Surfer's Paradise if there were enough jobs in those regions to support them. Or they would have stayed on the sheep stations in the interior to remain close to family.
Besides all that, low capital gains taxes and negative gearing created the investment class in housing. Ie. Those who have 3 or more investment properties as it is now so is a net gain to lose money on a poor rental investment. And banks feed off this investment, valuing properties within the metro areas at ever higher amounts, propped up by low capital gains taxes and negative gearing. It is a vicious cycle of capital speculation.
Even though for pure rental income from a property, regional areas have historically been better investments.
And btw surfers 1. Has the second highest growth in the country 2. Is anything but pleasant.
I say that as an Australian, where despite reasonable laws and ample land, we have some of the most expensive real estate per income in the world.
The issue is banking and tax law, which should weigh heavily on real estate capital gains, heavily on speculation and heavily on empty lots or tenancies. But go easier on rental income and losses.
These same arguments about nimbyism and building just have the effect of dividing and conquering, while carefully avoiding scrutiny of the real issue.. finance.