The Institutional Structure of Housing and the Sub-prime Crisis: An Australian Case Study

The global financial crisis was both precipitated by and had major effects on the performance of housing markets around the world. Australia was one of the few Western countries where the housing market was barely affected. There was a slight hiccup and then borrowing, construction and house price inflation continued on its pre-crisis course. For a country that on the surface is very similar to the USA and which had one of the worst affected housing markets, what could explain the difference? This paper is a broad-ranging, reflexive study which draws on an institutional framework to explore some distinguishing characteristics of housing provision in Australia which explain the paradox of the relative stability of the Australian housing system simultaneous with deepening housing affordability problems.