I think policy makers should restrict all grants(FHBG etc.) and exemptions(stamp duty) to only new construction. Negative gearing should also be restricted to only new dwellings. This will stimulate construction activity creating jobs in direct and related sectors. This will increase new dwelling supply(since we have a BIG shortage, property spruikers should not object to it :) ). It will have a balanced effect on overall house price by making existing dwellings less attractive, resulting in its price pressure, which will keep prices of new dwellings in check.
There should also be a limit on how much government can charge per sqm for a new unimproved land release. i.e. land price increase should be linked to real wage growths and not credit expansion.
