Property Shortages and Real Estate Myths
REWARD: $60 billion, for any developer or builder who can find them.
These are the 190,000 households that, according to the construction industry, are desperately seeking new homes but can’t get them.
I’ve been looking for them, but can’t find them.
I know many builders have been having the same problem.
I’m beginning to think they don’t exist.
The Housing Industry Association keeps telling us we have a chronic housing shortage, with a shortfall of 190,000 homes……..
…. If you’re looking for a copy of this publication, you’re likely to find it in libraries in the “fantasy” section, because the ABS tells us that the average first-home buyer in Australia borrows $292,000.
The report that claims unsatisfied demand for 190,000 new homes should be found in the “science fiction” section, alongside books that depict time travel and interaction with aliens from worlds a thousand light years from earth……
……The odd thing about this persistent complaint that we’re not building enough houses is that the loudest whingers are the people whose job it is to build houses. There are large tracts of zoned residential land in our cities (owned by major developers) waiting for houses to be built on them.
If we’ve got a 190,000 shortfall, why aren’t they frantically building?
If the HIA figures were true, we’d have tens of thousands of families living in tents or under bridges……
……I’ve taken a look at city vacancy rates, expecting them to be zero everywhere. That would be a reasonable expectation, if supply had fallen so far behind demand. But, according to RP Data, all our cities have vacancies above 3 per cent, except Canberra and Adelaide…..
….We’re talking true vacancies here, not the “lies, damned lies and statistics” published by the real estate institutes.
Something doesn’t add up here. If we really did have a chronic housing shortage, rents would be going through the roof.
…..Seasoned property market analyst Michael Matusik (of Matusik Property Insights) says we are actually heading into oversupply.
He says those who cry “undersupply” are miscalculating the impact of recent population growth.
Much of the nation’s population growth has come from overseas migrants, most of whom are “family reunion” migrants, students attending our universities or business people on temporary visas.
……..When you factor these matters into the supply-demand equation, he says, we’re actually over-building.
This runs contrary to the incessant campaigning of the developer lobby, whose members have motives that prevent them from giving the public accurate information.
Matusik says: “Disbelieve anyone whose sales pitch is based around how much the market is under-supplied.”
All of this is sober reading for property investors.