From a longer-term perspective, the challenge of providing an adequate supply of reasonably priced housing for an increasing population rests largely on the flexibility of land supply and, in particular, the supply of well-located land. This is because high housing costs largely reflect high land prices, not high construction costs.
Here, it is zoning regulations and the transportation infrastructure that can make a material difference. In both areas, progress has been made since 2010, but there is more to be done. Inflation The final issue is the inflation outlook. Six years ago, inflation rates in almost all advanced economies were below the midpoint of central bank targets. This remains the case today (Graph 9).