This short article is part of our '20 high impact research stories' series. This has been assembled to mark two decades of the City Futures Research Centre 2005-2025. Each of the 20 stories revisits an influential research study completed over those 20 years, linking it with related Centre projects and outcomes. A brochure version of all 20 stories will be published later in 2025.

For too long, housing policy in Australia has been largely treated as a population welfare issue, disconnected from the core debates shaping national economic strategy. During the late 2010s and into the early 2020s, City Futures Research Centre led a pioneering body of work that identified how housing system outcomes have undermined Australia’s economic performance.  

Lead-authored by CFRC Hon Prof Duncan Maclennan, our landmark report, Housing: Taming the elephant in the economy (2021), challenged this siloed thinking – and reshaped the conversation. 

Drawing on a national survey of 87 leading economists and housing experts, and underpinned by an extensive review of local and international housing economics literature, the report highlighted the under-appreciated reality that Australia’s housing system has become a key driver of rising socio-economic inequality, as well as financial system instability and stagnating urban productivity.  

The report’s profile and influence extended well beyond academia. Its vivid metaphor — likening the housing system to the parable of the blind men and the elephant — resonated across media, policy circles, and government. The report showcased compelling evidence of concerns widely shared among informed experts on the economic damage incurred by Australia’s under-performing housing system: 

• 85% of participants agreed that policy should better account for the productivity effects of housing outcomes. 

• 73% believed high housing costs impair economic growth by reducing labour mobility and market matching. 

• An overwhelming majority identified the lack of a coherent housing market strategy as a serious barrier to structural reform and post-COVID recovery. 

Australia’s housing sector now dominates national wealth and drives almost 15% of GDP through housing-related consumption. Yet despite this huge importance within the national economy, policy approaches on housing throughout the 2010s remained fragmented and reactive. 

Building on the evidence it laid out, the report called for a Royal Commission on Australia’s housing future, a Cabinet-rank housing minister in federal government, and the development of a national housing strategy. 

A foundation of evidence 

• Housing: Taming the elephant in the economy synthesized a series of earlier reports produced through the Centre’s housing-economy research program, led by Hon Prof Duncan Maclennan and also involving Prof Bill Randolph, Prof Hal Pawson,Dr Ryan van den Nouwelant and Dr Laura Crommelin. These studies laid the conceptual and empirical groundwork for the Elephant report, progressively building a case for integrating housing within economic policymaking. 
• Making better economic cases for housing (2018) was the starting point. Commissioned by the NSW Federation of Housing Associations and supported by the Greater Sydney Commission, this report identified five key ways in which housing shapes economic performance: through construction and employment, household consumption, human capital development, labour market efficiency, and local business vitality. It showed how these dimensions were undervalued in the housing policy of the day, creating blind spots in economic strategy. 
• Strengthening economic cases for housing policies (2019) extended this work by focusing on the consequences of poorly functioning housing markets in Sydney and Melbourne. It documented how rising land and housing costs were displacing both people and businesses, weakening agglomeration benefits, and inflating infrastructure costs — with significant implications for national productivity. 

• Housing and the economy: Interrogating experts’ views (2021) utilised a Delphi methodology involving interviews with 20 of Australia’s leading economists and other housing policy experts. Widely shared concerns about the damaging economic impacts of housing outcomes included those arising from the opportunity cost, as well as the financial stability risk, arising from over-investment in the housing stock as an essentially unproductive asset. 

Together, these reports informed Housing: Taming the elephant in the economy, creating a robust, evidence-based case for repositioning housing policy reform as central in enhancing Australia’s long-term economic wellbeing.