"This is forcing developers to move their attention to the fringe areas and add to the urban sprawl that the governments are claiming they want to stop."

Mr Hallett said that first home buyers are continuing to face a four edged whammy: higher prices in the inner mid range suburbs making housing unaffordable to them, higher prices on the fringe as governments apply infrastructure costs, rising interest rates and spiralling petrol prices which in some cases have reached in excess of $1.69 a litre.

"The high cost of fuel will mean young families living on the fringe and needing two cars will not be able to afford the cost of travelling long distances to employment placing more people under mortgage stress.

"The need to consolidate population growth within existing city boundaries has increased pressure for more medium density style developments in existing suburbs placing pressure on governments to simplify the existing and costly planning regulations."

Mr Hallett said that town planning red tape in Australia has become one of the greatest threats to housing affordability with many councils introducing differing rules and regulations from one council to the next as well as lacking resources to cope with the pressures.

"We believe state governments will take increasing control of the planning process at local government level by mandating medium density development around existing transport infrastructure to local government as the pressure for increasing populations close to capital cities increases."

In a secondary move to cope with the sea change and tree change population moves to the coast and country, governments will need to increase the potential for population densities in major regional centres with increased funding for infrastructure, Mr Hallett added.