Australians are poised to let another opportunity to reform our broken housing market pass us by - just like we did a decade ago after the mid 2000s property boom.

The pattern is well established now. As property prices rise, we wring our hands and worry about our kids being able to afford property - rightly singling out investor tax breaks, stamp duty and the unfair tax treatment of the family home as key reform areas. Then, the market turns. We sit on our hands and dither, concern for future generations surpassed by concern about our own depreciating asset. Or worse: we deliberately implement policies that add fuel to the property fire, just as the Rudd government did by increasing first home buyer grants during the global financial crisis. Boom inevitably follows bust. Price rises get built into the system. And another rung of lower income Australians get locked out of the homeownership market for good.

Illustration: Simon Bosch Credit:Fairfax Media

But it doesn’t have to be this way. A report released last week by the Australian Housing and Urban Research Institute and co-authored by eight respected housing economists has mapped out a pathway for comprehensive reform of our broken housing tax system. It begins by spelling out the problem: “Despite a sustained period of economic growth in Australia, housing affordability and accessibility have declined significantly in recent years. The resulting shortage of suitable, affordable housing is having an adverse effect on the housing needs and aspirations of many Australians and represents a growing risk to the Australian economy.”

Then it identifies a culprit: “There is increasing evidence that tax policy settings are contributing to the problem, exacerbating intergenerational inequality, inflated housing prices and reduced mobility.”