Owning a home is said to be the great Australian dream. Recent announcements by both sides of politics are targeting tax laws to try to make home owning more affordable.

The last time a nation’s government came up with policy with a focus on housing affordability, the end result was the GFC. In the United States, the Clinton Administration in the mid 1990's decided that they would devise a strategy that allowed everyone the chance to own a home. They came up with a document called "The National Homeownership Strategy: Partners in the American Dream."

They also promoted the use of creative measures (i.e. cheap and readily available money) to help people achieve home ownership. These "creative measures" created loans called sub-prime; if prime loans are considered the Roger Federer of loans (squeaky clean and rock solid), sub-prime are more your Nick Kyrigious variety. No deposits were required and the lending criteria was very loose and the end result was lots of people living in homes they could not afford. These sub-prime loans were packaged up and on sold to investors, including many Australian local government organisations. These councils are still after their cash (http://www.abc.net.au/news/2012-11-05/councils-to- recoup-gfc-loses-after-court-ruling/4353000).

“When Ma and Pa Kettle somewhere in the States realised they could not afford the home they were in, they defaulted on the loan and moved out. The result was a decimated American housing market, lots of Australian councils left out of pocket, and the world being pretty much stuffed for a few years,” explains Rohan.

Opposition Leader, Bill Shorten commented recently "We will put the great Australian dream back within reach of working and middle-class Australians, who have been priced out of the market for too long" by restructuring negative gearing and capital gains tax.

His goal is very similar to the Clinton Administration; to help those people who cannot afford a home to be able to buy one.

There is a fair bit of tax reform there as well, as investors negative gearing subsidies will be reduced over time.

Both sides of politics are looking at a big hole in funding since the resources boom tanked, and this may be an answer. Whilst the mechanism of stimulation is very different in terms of creating affordability, my question is what happens if our push towards housing affordability in Australia creates an unforeseen effect, similar to that which occurred with the GFC? We may be not deflating an overheated market, we may be bursting the bubble with some fairly dramatic consequences.