Leading members of academia and industry believe the government's focus on supply expansions as the primary means of improving home affordability is misplaced due to the distinctive economic behaviour of housing markets.

According to conventional economic wisdom, increasing the supply of a given good or commodity should serve as a surefire means of bring down prices and shoring up affordability. This mode of thinking has guided much policy formation directed at raising the affordability of housing in Australia, where sustained price gains in our leading cities have put a…